The Malaysian credit and charge card market is forecast to grow by 8.2% to reach MYR230.5 billion ($50.5 billion) in 2024, supported by rising consumer spending, according to GlobalData, a leading data and analytics company.

GlobalData’s Payment Cards Analytics reveals that credit and charge card payments by value in Malaysia registered a robust growth of 12.7% in 2023. A developing payment infrastructure, a growing e-commerce market, and a rapid shift towards cashless payments are further driving the adoption and usage of credit and charge cards among Malaysians.

Poornima Chinta, Lead Banking and Payments Analyst at GlobalData, comments: “Credit and charge cards are the most preferred payment card in Malaysia, accounting for over 60% of total card payments by value in 2023. Malaysians are increasingly using credit and charge cards for payments, with the frequency of payments per card standing at 77.3 times in 2023, compared to 31.2 times for debit cards. The country’s developing payment infrastructure, rising consumer awareness, growing merchant acceptance, and value-added benefits associated with credit and charge cards are supporting this growth.”

This high credit and charge card usage is driven by growing POS terminalization. Malaysia has a robust card acceptance network, with 26,228 POS terminals per one million individuals in 2023, which is higher compared to its peers including China (25,513) and Japan (20,867).

To further drive card acceptance among merchants, payment providers are launching all-in-one POS solutions for SMEs.  In July 2023, payment service provider Qashier launched QashierX2 that enables SMEs to accept payments via payment cards and mobile wallets. In addition, the Malaysian central bank is gradually reducing interchange fees to encourage merchants to accept card payments. Effective from January 1, 2023, the central bank capped interchange fees for credit cards at 0.6%.

Chinta adds; “Rising e-commerce payments are also contributing to the growth in credit and charge card usage as these cards are increasingly preferred for payment of e-commerce purchases, accounting for 16.8% share in 2023, according to GlobalData’s 2023 Financial Services Consumer Survey*.”

To further encourage credit and charge card payments and cater to the growing demand for Buy Now Pay Later (BNPL), banks are also now offering flexible payment options in the form of instalments. For instance, UOB Malaysia offers the 0% Instalment Payment Plan, enabling users to convert their purchases into monthly instalments without any interest rates.

Chinta concludes: “Credit and charge card payments are increasing in Malaysia, a trend that is anticipated to continue over the next five years. The economic growth, rise in consumer spending, and growth in e-commerce payments, coupled with government initiatives will continue to push credit and charge card payments usage in Malaysia.

“Subsequently, the credit card payments market in Malaysia is projected to register a compound annual growth rate (CAGR) of 6.9% between 2024 to 2028, to reach MYR301.3 billion ($66.1 billion) in 2028.”

*GlobalData’s 2023 Financial Services Consumer Survey was carried out in Q2 2023. Approximately 50,000 respondents aged 18+ were surveyed across 40 countries.