CONSUMER demand for real-time payments is on the rise in Malaysia as the pandemic accelerates digitisation of payments, according to new research from a global software company ACI Worldwide and YouGov (global public opinion and data company).
Due to rapid technological change, consumers now expect mobile-first and real-time experiences although payments have often lagged. The development of real-time payment systems enables consumers, merchants and financial institutions to pay friends and customers, settle bills and transfer money instantaneously.
The research found that more than half of consumers (52%) in Malaysia selected real-time payment methods – such as DuitNow – as a preferred way to pay in 2021 behind only cash (62%) and digital wallets requiring cash or card top-ups (62%).
This shift towards real-time payments has been dramatically accelerated by changing payment necessities and preferences caused by the COVID-19 pandemic.
One third (32%) of consumers in Malaysia have reduced their usage of traditional payment methods such as cash, credit cards and debit cards since the onset of COVID-19. As a result, almost half (45%) are now using real-time payments more than they were prior to the pandemic.
“This fundamental shift in consumer demand and payment expectations sets forth a challenge for Southeast Asia’s banks, financial institutions and merchants,” ACI Worldwide managing director (Asia) Leslie Choo said.
Launched in early 2019, DuitNow is Malaysia’s first real-time retail payment platform (RPP). It is operated by Payments Network Malaysia Sdn Bhd (PayNet), the national payments network and shared central infrastructure for Malaysia’s financial markets.
In 2019, Malaysia’s real-time payment transaction volumes stood at 7.1 million and is estimated to increase to 1.2 billion in 2024.
Meanwhile, the study also reveals how consumers in Malaysia expect the benefits of using real-time payments domestically to extend across borders once they begin to travel internationally again, as well as when they shop cross border.
For future international travel, consumers have elevated expectations for the transparency, safety and convenience of their payments when compared to their travel experiences pre-COVID-19:
- Almost half (49%) of Malaysian consumers who have travelled internationally in the past expect their usage of real-time payment methods to increase when they next travel.
- 70% said that the ability to use their preferred payment methods while travelling abroad will be more important now. As a result, a quarter (25%) expect their usage of traditional payment methods such as cash to reduce when they next travel.
- Three quarters (76%) say payment safety and fraud prevention is more important now, while two thirds (67%) say transparency of interchange rates is now of greater importance.
While the number of Malaysian consumers who are making international e-commerce purchases has increased over the past year, consumers are looking for further guarantees about payments to encourage them to do so more in the future:
- A quarter (25%) of consumers are shopping more with merchants based in other Southeast Asia countries since the start of the pandemic, while a similar amount (23%) are shopping more in stores outside of Southeast Asia.
- The most popular factors that encourage these shoppers to purchase products and services more regularly from international sellers are:
- Reassurance that payment and personal data are safely transmitted, secured and stored by international sellers (36%)
- Ability to pay with preferred domestic payment method (24%)
- Having a wider range of payment options than is available at present (24%) – July 7, 2021
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