By Razorpay Curlec Malaysia Country Head and CEO Kevin Lee
Malaysia has largely won the first battle of digitalisation: Adoption.
In 2025, Malaysians made 18.4 billion e-payment transactions, up 25% from the year before. Digital payments are no longer a niche behaviour. They are embedded in how people spend, how businesses collect revenue and how the wider economy moves money.
The more important question for Budget 2027 is what comes next.
Malaysia’s second act of digitalisation should not be measured by how many more businesses adopt digital tools, but by how effectively those tools help businesses run.
For enterprises and SMEs, a payment does not begin and end when a customer clicks “pay”.
Behind every transaction are processes involving order confirmation, reconciliation, settlement visibility, refunds, disputes and cash-flow management. When those systems do not connect, businesses fill the gaps manually.
For large enterprises, dedicated finance and technology teams may absorb that complexity. For SMEs, the same responsibilities may sit with the owner or a small team already managing sales, suppliers, staffing and customers.
That gap matters.
MSMEs contribute nearly 40% of Malaysia’s GDP. When small businesses spend unnecessary hours reconciling transactions, checking settlements or resolving payment exceptions manually, those inefficiencies accumulate across the economy.
Budget 2027 should therefore shift the focus from simply encouraging digital adoption to making end-to-end digitalisation practical.
Payments should connect more easily with accounting, finance and operational systems. Businesses need accessible training, better-integrated tools and clearer ways to manage increasingly digital workflows.
The real test of digitalisation should be simple.
Can a business account accurately for its online payments? Can staff resolve exceptions quickly? Can finance teams see what has been settled and what remains outstanding in minutes rather than hours or days?
Digitalisation creates economic value when it reduces friction in these everyday processes.
AI Must Solve Problems, Not Create New Ones
Artificial intelligence (AI) can help accelerate this shift.
AI can retrieve transaction information, assist with reconciliation, investigate exceptions, identify anomalies and prioritise cases for review.
But businesses should start with the problem, not the technology.
Before adopting AI, there should be a clearly defined business need and a way to measure whether the technology improves that process.
This becomes particularly important when AI is used in activities involving money.
There is a major difference between using AI to locate a payment record and allowing an AI-enabled system to initiate a refund, approve an action or modify an account setting.
As capability increases, controls must increase with it.
Access, approval, authentication and accountability cannot be treated as secondary considerations.
Trust is already under pressure. Online scam losses in Malaysia nearly doubled to RM2.97 billion in 2025.
AI can help detect suspicious behaviour, prioritise alerts and support investigations, but decisions involving liability, compensation and disputes must remain with accountable decision-makers.
Customers and merchants must also have clear avenues to challenge mistakes.
As AI becomes embedded in how money moves, trust becomes the real currency.
Every gain in capability must be matched by stronger controls over who can access, approve and authenticate a transaction — and who is accountable when something goes wrong.
Budget 2027 Should Build Confidence Alongside Capability
This is also where policy and regulation need to move together.
Bank Negara Malaysia’s (BNM) Technology Requirements for Payment Services Regulatees, which take effect in March 2027, reinforce the importance of technology risk management, security and operational resilience.
Budget 2027 can complement this by helping Malaysian businesses develop not only stronger digital capabilities, but also the skills and confidence to use new technology responsibly.
The same agenda should extend beyond Malaysia.
For local businesses entering regional markets, payments form part of the commercial decision.
Companies need clarity on how customers will pay, applicable fees, currency conversion, settlement timelines and how refunds or disputes will be managed.
Interoperability can make this easier, particularly when combined with clear rules and predictable processes.
BNM’s Interoperable Fund Transfer Framework already provides an important foundation for connected payment services and fair access to shared infrastructure.
The next step is ensuring Malaysian businesses can translate those foundations into actual regional competitiveness.
The Next Phase Must Deliver Business Outcomes
Malaysia has already shown that consumers and businesses are willing to go digital.
Budget 2027 should now focus on whether digitalisation actually helps businesses become more productive, more efficient and more competitive.
The objective should be to give enterprises and SMEs the infrastructure, skills and confidence to put AI and payment innovation to work in ways that produce measurable commercial outcomes.
That means less time spent reconciling transactions. Faster exception handling. Better visibility over cash flow. Stronger fraud controls. Easier regional expansion.
Malaysia’s next digital milestone should not be another record number of transactions.
It should be a business environment where technology allows companies to run leaner, grow faster and compete beyond Malaysia’s borders — without compromising trust in how money moves.
