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Payment infrastructure does matter for Malaysian SMEs in 2026

Trust in the age of AI TRUST has become one of the most valuable assets in today’s digital economy. Every day, millions of payments move seamlessly across borders, powered by a shared confidence that transactions are secure. Yet that confidence has been under strain as fraudsters use artificial intelligence (AI) to sharpen their tactics, turning normal interactions into potential vulnerabilities. unfamiliar device, unusual location, or sudden behavioural shift that the consumer does not usually do. There is an intrinsic balance between security and friction. Declining a legitimate payment creates inconvenience and chips away at the seamless experience consumers expect. To strike the right balance, our partners work with us to combine traditional rule-based systems with machine learning models that continuously retrain themselves.

working with different partners to share intelligence on fraud and scams. When a wave of fake investment sites or phishing texts appears in one market, data and insights are quickly passed to partners elsewhere, along with the updating of fraud models to help stop and contain the spread of these new forms of fraud. In addition, we also introduced our Visa Scam Disruption practice, a dedicated, proactive capability designed to identify and stop complex scams as they emerge. It combines Visa’s network level data, advanced AI, and deep human expertise to detect scam activity early and disrupt it at scale. The practice supports banks, businesses and consumers by strengthening trust and protecting the integrity of the payments ecosystem. Technology initiatives reflect this shared responsibility. Tokenisation, for instance, replaces card numbers with unique digital tokens that are worthless if stolen, reducing the value of compromised data. Visa estimates that network tokenisation can lower fraud rates by up to 60% and has already prevented hundreds of millions of dollars in attempted fraud globally. Currently, there are approximately 17.5 billion payment tokens circulating globally — more than three times the number of physical cards, according to Visa Quarterly Earnings 2026 data as of March 2026. We have been working closely with issuing and acquiring partners while introducing programmes to encourage tokenisation adoption, with the goal of making online shopping more secure for everyone. In addition to reducing fraud, tokenisation supports the growing use of agentic commerce, where agents can transact on behalf of consumers and businesses — forming a secure foundation for new ways of commerce to grow. Designing AI around trust Looking ahead, AI will not just score transactions but influence how people prove who they are and how digital systems act on their behalf. Today’s wallets already use biometrics like fingerprints and facial recognition, while emerging standards such as passkeys aim to reduce dependence on passwords. Soon, trusted agents that are authorised to shop, pay bills, or negotiate for consumers and businesses will become the norm. This evolution brings convenience but also new challenges. How can merchants confirm whether a request comes from a legitimate agent or a malicious bot? How can banks explain why an AI model blocked one transaction but approved another? And how can regulators ensure oversight of systems that learn and evolve continuously? The answer lies in making trust a design principle, not an afterthought. That means using AI to strengthen, not erode, public confidence in the financial system. This article is contributed by Visa head of value-added services, regional Southeast Asia Varun Mahindru ( pix ).

MALAYSIA has made cashless payment acceptance a national priority for a decade. Bank Negara Malaysia data shows e-payment transactions per capita reached 409

billion in online scam losses in 2025, with e-commerce and e-finance fraud accounting for over RM580 million. For a micro-enterprise, one unverified transaction can erase a week’s earnings. Merchants that are laser-focused on maximising revenue

in 2024, signaling that online payments are now commonplace for many Malaysians. For the 1.3 million

during peak periods, should not be bogged down by extra manual checks. Verification must sit inside the infrastructure through authenticated confirmations and tools such as a modern POS system or POS machine.

Fraud has always followed the money, but AI has changed its shape and speed. Today, generative tools can write convincing scams in seconds, clone voices from short recordings, and spin up fake websites that mirror legitimate ones. According to Sumsub’s latest Identity Fraud Report published in November 2025, deepfake enabled scams in Malaysia have surged by 408% year-on-year. These AI generated impersonations now make up a significant share of regional fraud attempts, underscoring the need for stronger digital identity verification and prevention measures due to rising sophistication in scams. From discussions with risk teams, our partners and regulators, it is clear that today’s battleground is not just how much fraud occurs, but how quickly it evolves, and how fast defenders can adapt without eroding the trust they aim to protect. The AI arms race in payments The silver lining is that the same technology driving fraud is also securing payments. Each time someone taps a card, buys a coffee, or books a trip online, AI models are quietly at work. Every transaction is risk-scored in real-time and assessed against billions of others to flag anomalies. This includes an

MSMEs that underpin the economy, 2026 marks a shift. Acceptance is no longer the challenge. Efficiency is. Front-end systems look modern, but back-end operations for many businesses still rely on high-fee legacy setups, multi-day settlements, and manual reconciliation. Integrating a payment gateway API or a dedicated DuitNow API is becoming essential to solve these bottlenecks. These create ongoing drag on margins and cash flow. With Malaysia’s digital economy projected to exceed 25% of GDP, payment infrastructure must deliver real economic value: lower friction, faster fund access, and simpler daily operations. Without it, digital adoption alone cannot drive sustainable growth. Making infrastructure work more evenly for smaller businesses For years, the most efficient payment rails belonged to large enterprises with scale and technical resources. Smaller businesses absorbed higher costs and delays. That gap is closing. Retailers in Penang and cafes in Ipoh can now reach the same direct clearing, low-friction systems like FPX payments as multinationals. This levels the field for margin protection and working-capital management. The change aligns directly with the 13th Malaysia Plan (2026–2030) and its reshaping development focus. The plan moves past basic digitisation towards technology-led efficiency and commercial viability for MSMEs. Payment infrastructure, including versatile invoicing software, plays a central role here. It must support the shift from survival mode to structured growth by reducing hidden costs that previously limited reinvestment in operations and expansion. We’ve seen first-hand how this delivers practical results. Since 2020, our platform has helped merchants across the region save more than US$30 million (approximately RM132 million) in transaction fees by shifting to local rails such as DuitNow QR. In 2025 alone, we helped our merchants save US$10 million in capital. Closing the trust gap in real-time payments Across the region, we are seeing a structural shift towards account-to account payments and real-time bank rails. While real-time payments promise speed, they also bring new risks. Trust, therefore, becomes a crucial infrastructure issue. For example, QR overlay scams remain a prevalent issue which divert daily collections before merchants notice. Malaysia recorded RM2.7

This multi-layered defence now spans the payment lifecycle: from account creation and device enrolment to authorisation and post transaction monitoring for fraud. With Visa’s recent acquisition of Featurespace, AI systems can now provide that end-to-end comprehensive view, using adaptive behavioural models to risk-score transactions across cards, account to-account transfers and real-time payments on a single platform. Because this solution is payment mode agnostic, banks and payment firms can detect new fraud patterns across multiple rails rather than react to new tactics individually. For consumers and businesses, that means suspicious activity can be intercepted earlier, and more good transactions can be approved without friction. Trust built through partnership No single institution can see the full threat landscape. That is why collaboration is key and has become the defining strategy for tackling AI driven fraud. By extension, ensuring trust is the foundational layer that we should continue to keep top-of mind. Across Asia Pacific, we are

Whether a merchant uses a handheld card reader or an eCommerce website builder with built-in security, BNM’s emphasis on secure digital channels underscores the need for embedded safeguards that protect cash flow without E-invoicing rollout and Visit Malaysia 2026 will increase commercial activity, making sharper visibility over payments, cash flow, and reconciliation essential for Malaysian SMEs. Mandatory e-invoicing phases will require precise transaction tracking across channels. Tourism inflows projected to rise significantly under Visit Malaysia 2026 will further amplify the need for instant, reliable settlement to handle seasonal peaks without liquidity gaps. The subscription economy is also gaining traction. Businesses such as fitness studios, online courses, meal plans, and service providers now require reliable recurring billing tools. For example, Touch ’n Go supports automatic subscription renewals once customers link their eWallet. This reduces failed transactions and manual follow-ups, delivering more predictable revenue streams. Cross-border payment connectivity is advancing at pace. DuitNow’s expansion across Southeast Asia allows regional businesses to accept cashless payments from Malaysian shoppers through Borderless QR for in-store use, a Shopify payment gateway with multicurrency checkout for online stores, and instant MYR payment links for business. For firms handling B2B payments or requiring a remittance API for global money transfer, activation is now fully automated. This points to a broader shift in how merchants manage payments and cash flow. On our platform, non card transaction volumes have grown 124 times since 2020, reflecting rising demand for faster access to funds, lower complexity, and smoother regional operations. The next phase of online payments in Malaysia will not be defined by access alone. It will be defined by whether the infrastructure enables smaller businesses to retain more earnings, accelerate cash flow, and build operational resilience. This article is contributed by adding operational burden. Why this matters in 2026

HitPay founder and CEO Aditya Haripurkar ( pix ).