Visa has revealed that more than 50% of its face-to-face transactions are now made up of contactless payments, indicating a shift in the preferred payment method among Malaysians. Citing this as a new milestone in the country, the payment service provider also said that the increased adoption of digital payments is driven mainly by usage in F&B, quick service restaurants, department stores, and pharmacies.
“The Covid-19 pandemic has fuelled the adoption of digital payments in Malaysia, especially contactless payments and e-commerce. In the past couple of years, we have seen strong growth in contactless payments due to the expansion of contactless acceptance across the country. Consumer behaviours are also changing with a growing preference for digital purchases,” said the country manager of Visa Malaysia, Ng Kong Boon.
Ng’s observation is backed by data from Visa, which showed that the overall e-commerce expenses have experienced a double-digit year-on-year growth as of June 2020. In fact, online transactions that fell under the categories of food and groceries saw a triple-digit year-on-year increase. Retail goods grew significantly as well, clocking in close to a three-fold growth in comparison to last year.
On top of that, Visa also noted that one out of five active Visa cardholders who were not e-commerce customers last year made their first online purchase during the first half of 2020. 30% of the expenses by these cardholders are made up of essential services – such as food, groceries, pharmaceutical and health products, as well as utilities. This is followed by retail shopping at department stores and retail outlets. Meanwhile, purchases for business categories and professional services contributed to 19% of the online spend by cardholders who are new to e-commerce.
Ng further expressed that with this shift towards an increasingly digital lifestyle, there are growing opportunities for online businesses. Consequently, small businesses and merchants should focus on enabling digital payments acceptance and establishing a digital presence amidst the current environment.
“By adopting digital payments, merchants can cater to their consumers’ needs whilst growing their digital footprint, locally and cross-border. With initiatives such as the government’s ‘Buy Malaysian Products’ and the ‘Where You Shop Matters’ campaign by Visa, business owners can leverage on these platforms and resources to expand their online presence and reach their target markets,” Ng said, adding that this will support the nation’s digital transformation plans and Bank Negara Malaysia’s (BNM) cashless agenda.