Going cashless has many benefits for a nation, and Malaysia’s government is keen on creating the infrastructure to help its residents and businesses make that transition.
According to a new Nielsen study, 67 percent of consumers in the country have used some form of cashless payment, with debit cards and online banking being the most preferred non-cash channels. However, a very small percentage prefer to use cashless payments to pay for meals, groceries, and other everyday expenses.
To be precise, while 63 percent percent of Malaysians have a debit card, 93 percent prefer cash when they dine out, 90 percent use cash when they buy groceries, 89 percent use cash for public transport, 81 percent for petrol, and 81 percent for taxis.
Despite the challenges to digital payments, the study revealed that Malaysians prefer to make recurring expenses such as phone and internet bills (53 percent), utility bills (47 percent), car loan installments (38 percent) and rent (37 percent) via online banking because of the sheer convenience it offers.
The growing opportunity for mobile wallets in Malaysia
Only 8 percent of Malaysians use mobile wallets — but Nielsen believes it represents a great opportunity for banking and fintech businesses in this space.
“Malaysia’s younger, more tech-savvy population, which may not have sufficient credit history to qualify for a card, could be more open to using e-wallets for everyday expenses due to the convenience factor,” said Nielsen Malaysia Consumer Insights Executive Director Anil Antony.
Given the high smartphone penetration and mobile data usage in Malaysia, mobile wallets have relatively fewer hurdles to cross before they hit critical mass in the market.
Consumer awareness is also quite high in the country, measuring up at 88 percent. The number is much higher compared to other markets such as Thailand and the Philippines, meaning convincing customers to try out mobile wallets is going to be easier for companies in Malaysia.
Nielsen found that existing mobile wallet users cite convenience as the biggest driver of usage, and believe that adoption will continue to rise driven by the increasing popularity of app-based online shops, ride-hailing services, online gaming, and cinema ticket bookings.