Malaysia is a Cash-driven Country
Despite recent claims that Malaysia is moving towards a cashless society, cash in fact remains the country’s number one payment choice, retaining top spot even after a decline since the pandemic began, and alongside the rising popularity of cards and digital wallets.
Data from the 2022 Global Payments Report shows cash is used for 39 percent of point-of-sale transactions, well ahead of credit cards at 27 percent and digital wallets at 15 percent. This is a small decrease from 43 percent in the 2021 report.
The 2022 Digital Payments Insights Study also highlights the continued dominance of cash, with 78 percent of Malaysians saying they prefer cash to other payment options and 48 percent saying they use it on a daily basis. The authors point to businesses on the south and east coasts as being especially strong users of cash, with card payments gaining popularity and cheques largely falling out of use (down to being the favoured payment choice of just five percent of the population, from nine percent pre-pandemic).
The study also found 49 percent of Malaysians feel it’s easier to pay by cash than e-wallet while 46 percent fear overspending when using cards rather than cash. 26 percent are concerned over the security of e-wallets, with 24 percent sharing that concern with cards. 34 percent of merchants question the level of e-wallet security and 32 percent question card security. The same percentage prefer cash due to card processing fees.