Digital payments adoption is fast gaining traction locally as Malaysians adopt innovative payment options and leapfrog into mobile-first ecosystems, a new research by Mastercard showed Tuesday.
The research which surveyed consumers across the globe on payment preferences has found that almost two-thirds (63 percent) of Malaysian consumers prefer using new and innovative methods such as Tap & Go mobile payments, biometric payments, QR codes and mobile wallets — over traditional methods like cash or manual card entry, reflecting a widespread appetite for innovation.
This compares to just 25 percent in North America, 24 percent in Europe and 53 percent in Asia Pacific (APAC) overall, underlining Malaysian consumers’ receptivity to adopting emerging digital payment solutions.
According to the research, digital payment adoption is set to surge in Malaysia, with 99 percent of consumers likely to use emerging digital payment methods in the next year.
They also want a choice in payment types, with 93 percent likely to use five or more payment methods in the next 12 months.
While cash is still Malaysia’s most used payment method – 70 percent of consumers used it in the last year, narrowly edging out QR code payments (64 percent), usage of digital payment methods is set to rise in the next year.
In Malaysia, 86 percent of consumers are likely to use instant payment services, while 85 percent and 83 percent expect to use QR code payments and digital wallets, respectively, in the year ahead.
This preference for innovation applies to other emerging technologies as well, with 89 percent of Malaysian consumers (compared to 86 percent across APAC more broadly) saying they are keen to use artificial intelligence (AI) to manage their finances, particularly for fraud detection, payment automation, product personalization, and predicting financial outcomes.
There is also rising demand for payment options to maximize the value of their wallets: 91 percent of Malaysians agree that their current financial status plays a substantial role in their choice of payment methods, amongst the highest globally.
The research also showed that as payment options grow, consumers are seeking hyper-convenient ways to manage money that fit seamlessly with their digital usage habits.
According to the research, they want flexibility to customize how they pay, tapping into digitally native methods like peer-to-peer or peer-to-merchant payments, QR codes, wearables, and social commerce.
Indeed, 92 percent of Malaysians agree that companies should make it as simple as possible for consumers to buy from them, with 86 percent agreeing that they should be able to buy anything at any time, regardless of the type of payment methods.
It is noted that super apps are the new baseline. In Malaysia, 75 percent of consumers use or want all-in-one apps to manage payments, shopping, and more.
As these platforms become mainstream, payment tools must meet consumers where they already are, not the other way around, Mastercard pointed out.
Meanwhile, social shopping is shaping commerce, especially for younger consumers.
In Malaysia, 54% of Gen Z consumers and 46 percent of Millennial consumers prefer buying through social apps as compared to a merchant’s website.
In fact, 72 percent of Malaysians say influencers now shape their buying decisions – eight percentage points higher than the region’s average.
Thus, embedding seamless payments into digital leisure spaces like social media apps is key to enabling this shift from browsing to buying.
The research also highlighted that trust and security are top of mind.
While 72 percent of Malaysian consumers see biometric payments as more secure than traditional methods, 84 percent are concerned about who has access to their data, 6 percentage points higher than the APAC average.
This tension highlights a broader challenge to simplify security without sacrificing control and convenience. Mastercard solutions like tokenization, Payment Passkeys, and AI-driven authentication help bridge this trust gap.
These growing demands also highlight the need for financial innovations that are relevant by design, not retrofitted from legacy systems.
“These findings reaffirm that the digital evolution in payments has firmly taken center stage in Malaysia,
“With digital-first and mobile-first lifestyles shaping consumer behavior, innovation and security in payments will be key to sustaining this momentum,” said Beena Pothen, Country Manager, Malaysia & Brunei, Mastercard.
The findings in this release are based on a global research study conducted by The Harris Poll on behalf of Mastercard.
The survey gathered responses from 19,302 consumers across five global regions, including 9,131 consumers in Asia Pacific and 1,010 in Malaysia.
The study was conducted via a quantitative online survey, administered from September 4 to September 20, 2024.
It covered five regions: North America, Latin America and Caribbean, Europe, Middle East & Africa, and Asia Pacific. APAC markets included Australia, China, India, Indonesia, Japan, Malaysia, Singapore, Thailand, and Vietnam.