Malaysia’s Cards and Payments Industry: Emerging Opportunities, Trends, Size, Drivers, Strategies, Products and Competitive Landscape

Date: 2015-09

“The Malaysian payment cards instrument registered positive growth during the review period (2009โ€“2013), recording a compound annual growth rate (CAGR) of 7.09% to reach 50.5 million cards in circulation by the end of 2013. In terms of transaction value, payment cards valued MYR402.9 billion (US$128.2 billion) in 2013, after registering a review-period CAGR of 6.87%. Robust economic performance, improved banking infrastructure, new product developments and growing acceptance of card-based payments at POS terminals and on public transport were key factors driving growth. The adoption of Europay, MasterCard and Visa (EMV) standards, and the emergence of contactless technology also supported the growth.
The average transaction value (ATV) in Malaysia in 2013 was US$141.1, lower than China and Thailand, which recorded ATVs of US$299.1 and US$152.6 respectively, but higher than Australia and India, which recorded ATVs of US$104.9 and US$59.2 respectively. Of these five countries, Australia recorded the highest frequency with 100.3 transactions per card, while Malaysiaโ€™s was relatively low at 18.7. China recorded had the highest level of penetration of 3.0 cards per individual among the peer countries, followed by Australia with 2.9, Malaysia with 1.7, Thailand with 0.9, and India with 0.3.
The growing use of Touch โ€˜n Go (TNG) payments on public transit systems have driven the growth of prepaid cards. TNG is a prepaid e-cash card launched in 1997, and was one of the first to offer contactless card transactions in the country. TNG accounted for 98.8% of all e-money (prepaid cards) transactions in Malaysia, in terms of transaction volume, in 2011, and the system is capable of processing over 3 million transactions per day. It is around three times faster than cash for transit or toll payments. Initially developed as a toll card, TNG has expanded its application into areas such as public transport, parking, theme parks and some retail outlets. The card can be reloaded at multiple locations such as customer service centers on highways, some petrol stations, TNG โ€˜hubsโ€™, and bank automated teller machines (ATMs) and cash deposit machines (CDMs).”

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