Source: GlobalData
Malaysia payment card market to surpass $177 billion in 2025 as POS overtakes ATM withdrawals, forecasts GlobalData
Posted in Banking
The Malaysian payment card market (including at POS and ATM cash withdrawals) is expected to grow by 4.0% to reach MYR814.1 billion ($177.9 billion) in 2025e, driven by a clear shift from cash to digital payments. Contactless cards and wider card acceptance are playing a key role, with card payments at POS now set to overtake ATM cash withdrawals for the first time, reveals GlobalData, a leading data and analytics company.
GlobalData’s Payment Card Analytics reveals that payment cards value in Malaysia registered a healthy compound annual growth rate (CAGR) of 8.0% between 2020 and 2024 to reach MYR783 billion ($171.1 billion) in 2024. On the other hand, card usage for ATM cash withdrawals is reducing with total ATM withdrawals registering low CAGR of 1.1% during the same period.
Shivani Gupta, Lead Banking and Payments Analyst at GlobalData, comments: “Although cash remains prevalent in Malaysia, it is gradually losing ground to electronic payments. There has been significant progress in the adoption of card-based payments, which recorded a CAGR of 20.4% between 2020 and 2024 in terms of transaction volume. This growth is primarily supported by the government’s financial inclusion initiatives, such as capping interchange fees, issuing licenses for digital-only banks, and developing payment infrastructure in the country.”
While cash has traditionally been the preferred payment method in Malaysia, its share is steadily declining as digital payments gain traction, with payment cards and digital wallets emerging as the main beneficiaries. The share of ATM cash withdrawals now represents 49.8% in 2025, much lower compared to 63.3% in 2021.
Card payments at POS terminals, on the other hand, are steadily increasing, with its share is estimated to reach 50.2% in 2025. This growth can be attributed to the rising consumer awareness, growing POS terminalization, and the introduction of contactless debit cards by banks. The capping of interchange fees for domestic and international debit cards at 0.10% and 0.27%, respectively, and at 0.6% for credit cards, also contributed to this as this encouraged more merchants to accept card payments.
The growing popularity of contactless payment has also driven the overall card usage at POS, gradually displacing cash for day-to-day transactions. Backed by most banks and financial institutions in the country, contactless payments have become increasingly prevalent and are also widely accepted by most retailers.
According to GlobalData’s 2024 Financial Services Consumer Survey*, over 63% of the respondents in Malaysia indicated having access to a contactless card and used it for payments.
The increasing use of contactless payments for public transport payments is also contributing to the growth of card payments. For example, in March 2024, the highway operator PLUS Malaysia introduced contactless credit and debit card payment capabilities at the toll plaza on the Penang Bridge. Commuters can simply tap their cards on the MyDebit-Visa-Mastercard device to complete toll payments, with the toll fee deducted directly from their card balance. These advancements indicate a growing trend towards the normalization of cashless and contactless payment methods in Malaysia.
Despite the increasing popularity of electronic payments, cash remains widely used in Malaysia due to consumer cultural preferences and the perceived convenience and security it offers. Consequently, Malaysia’s transition to a less-cash society is expected to be a gradual process.
Gupta concludes: “Looking ahead, Malaysia’s payment card landscape is poised for steady growth over the next five years, driven by the increasing adoption of payment cards amid a boarder digital transformation. Government initiatives, rising consumer preference for digital payments, and developing card acceptance infrastructure are expected to further drive/support this growth. Subsequently, the payment cards value is anticipated to grow at a CAGR of 4.5% between 2025 and 2029 to reach MYR969.9 billion ($211.9 billion) in 2029.”
*GlobalData’s 2024 Financial Services Consumer Survey was carried out in Q2 2024. Approximately 67,292 respondents aged 18+ were surveyed across 41 countries.