Malaysia’s payment card market is on track to reach RM814.1 billion in 2025, marking a 4.0% annual growth, as consumers continue to shift from cash to digital payment methods. This milestone, reported by GlobalData signals a significant transformation in the country’s financial habits, with payment card usage at point-of-sale (POS) terminals expected to overtake ATM cash withdrawals for the first time.

According to GlobalData’s Payment Card Analytics, the value of payment card transactions in Malaysia grew at a robust compound annual growth rate (CAGR) of 8.0% between 2020 and 2024, reaching RM783 billion in 2024. Conversely, card usage for ATM withdrawals lagged behind, with a modest CAGR of just 1.1% over the same period, reflecting a shift away from cash-dependent transactions.

Shivani Gupta, Lead Banking and Payments Analyst at GlobalData, noted that while cash is still a dominant payment method, its stronghold is weakening. 

“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 licences for digital-only banks, and developing payment infrastructure in the country,” she said. 

In 2025, ATM cash withdrawals are expected to account for just 49.8% of all card transaction value, down sharply from 63.3% in 2021. In contrast, card payments at POS terminals are set to rise to 50.2%, buoyed by increased consumer awareness, greater availability of POS terminals, and the widespread issuance of contactless debit cards. Interchange fee caps, 0.10% for domestic debit cards, 0.27% for international debit cards, and 0.6% for credit cards, have further incentivised merchants to accept card payments, contributing to this shift.

The adoption of contactless technology has also played a pivotal role in this transition. Backed by banks and embraced by retailers, contactless payments are steadily replacing cash in everyday transactions. According to GlobalData’s 2024 Financial Services Consumer Survey, more than 63% of Malaysian respondents reported owning and using a contactless payment card.

Despite these advances, the journey toward a fully cashless society in Malaysia is expected to be gradual. Cultural preferences, and the perceived convenience and security of cash, continue to sustain its use among certain demographics.

Looking ahead, GlobalData forecasts that Malaysia’s payment card market will continue to grow steadily. With ongoing digital transformation, supportive government policies, and expanding card acceptance infrastructure, the market is projected to grow at a CAGR of 4.5% from 2025 to 2029, reaching RM969.9 billion by the end of the period.

(Source: GlobalData)

• TAGS:
• ATM Withdrawals
• Card Payments
• GlobalData
• GlobalData’s 2024 Financial Services Consumer Survey
• Payment Card Analytics