7/09/2025

ON SUNDAY September 7, 2025 X theSunday Special

Cash, credit and e-wallet shaping Malaysian spending BY ASHRAF WAHAB

Our country’s push towards a cashless society is well underway, with significant strides made in both urban and rural areas.”

A UH SK\VLFDO EDQNQRWHV VWLOO relevant? Despite the rise of digital payments, cash UHPDLQV D VLJQL¿FDQW SDUW RI 0DOD\VLD¶V economy. A study by PayNet reports that 78% of Malaysians still prefer cash due to its ease of use and trustworthiness. However, the trend is shifting. More than half of Malaysians now use non-cash payment methods, with e-wallet adop tion rising 14% in 2024 compared to the previous year. G HQHUDWLRQDO SD\PHQW SUHIHUHQFHV Payment preferences vary across age JURXSV • 1 ± \HDUV ROG Highest e-wallet XVDJH UHÀHFWLQJ WKHLU WHFK VDYYLQHVV • 2 ± \HDUV ROG Leading users of online bank transfers and e-wallets. • 3 ± \HDUV ROG Favour debit cards for their transactions. • 4 ± \HDUV ROG Gradual increase in online banking and e-wallet usage, though adoption is slower due to digital literacy challenges. C KDOOHQJHV IRU WKH HOGHUO\ As Malaysia moves forward with its GLJLWDO ¿UVW IXWXUH FRQFHUQV DUH JURZLQJ about the challenges such a shift is having on senior citizens. Older people make up 11.6% of the total population, equating to approximately 3.9 million individuals, many of whom have expressed frustration as they navigate digital procedures. To address these challenges, the Federation of Malaysian Consumer As sociations (Fomca) suggests introducing

user-friendly interfaces with larger fonts, voice-guided navigation and dedicated helplines to improve accessibility for seniors. L HDUQLQJ IURP JOREDO GLJLWDO VRFLHWLHV Malaysia’s digital transformation is part of a broader global trend. Countries like (VWRQLD %HOJLXP DQG 8NUDLQH R̆ HU YDOX DEOH OHVVRQV • E VWRQLD Known for its advanced H JRYHUQPHQW VHUYLFHV R̆ HULQJ QHDUO\ all public services online, including electronic voting. • B HOJLXP The Belgian government has imposed a cash payment limit of €3,000 (approximately RM14,524). Most electronic transactions here utilise the mobile application Sixdots, in addition to debit cards. • U NUDLQH The Diia app allows citi zens to use digital documents on their smartphones and access over 130 government services. T KH URDG DKHDG Malaysia’s push towards a cashless society LV ZHOO XQGHUZD\ ZLWK VLJQL¿FDQW VWULGHV made in both urban and rural areas. Government initiatives, coupled with technological advancements, are driving this change, making digital payments more accessible and convenient for all Malaysians. As we look to the future, continued efforts to bridge the digital divide and learn from global best practices will be crucial in ensuring that every Malaysian can participate in the digital economy.

I N 2025, the way Malaysians pay for their daily needs has undergone a significant transformation. The era of fumbling for cash is fading, replaced by the swift tap of a card or the scan of a QR code. But how widespread is this shift and what does it mean for the average Malaysian? Malaysia’s journey towards a cashless society has been nothing short of remark able. According to GlobalData, the card payment market in Malaysia is projected to reach MYR422.4 billion ($92.6 billion) by 2025, driven by increasing consumer spending and a growing shift toward digital payments. E-wallets have also seen a surge in adoption. A report by Oppotus indicates that e-wallet usage reached a record-high adoption rate of 90% in Q3 2024, with an average monthly spending of RM414.1. Touch ‘n Go remains the dominant player, with 92% of users, followed by MAE at 51%. The Malaysian government has played a crucial role in promoting digital payments. The “Cashless Boleh 5.0” campaign aims to increase the number of participating agencies to over 105 and achieve a 90% digital payment penetration rate in the public sector. This initiative supports Ma laysia’s goal of becoming a cashless society, enhancing transparency, convenience and Ḣ FLHQF\ LQ SXEOLF VHFWRU WUDQVDFWLRQV Furthermore, the government has introduced e-invoicing to improve tax

compliance and enhance revenue collec tion. Urban vs rural: Bridging the gap While urban areas, such as Selangor and Penang, have achieved over 90% adop tion of cashless payments at government agencies, rural regions are also catching up. States like Perlis, Kedah and Perak have adoption rates of 60%, 80% and 49%, respectively. To address the digital divide, the government has licensed digital-only EDQNV VXFK DV WKRVH SURYLGHG E\ ¿QWHFK companies, creating opportunities for the underserved population to access banking services without physical branches. This move is expected to reduce the unbanked rate to below 10% by 2025. T KH EHQH¿WV RI FDVKOHVV SD\PHQWV G RLQJ FDVKOHVV R̆ HUV VHYHUDO DGYDQWDJHV • S SHHG DQG Ḣ FLHQF\ Digital trans actions are faster, reducing queues and wait times at checkout. • E QKDQFHG VHFXULW\ Cashless pay ments reduce the risk of theft and counterfeit money. • C RQYHQLHQFH With mobile wallets and contactless cards, consumers can make payments without carrying physi cal cash. • B HWWHU ¿QDQFLDO WUDFNLQJ Digital payments provide a clear record of transactions, aiding in budgeting and expense tracking.

Digital payments bring speed, security and convenience while making expense tracking easier.