The digital payments and online market industry in Malaysia is positioned for growth. This is currently made possible by increased internet penetration and high mobile cellular adoption. The total transaction value in the digital payments sector already amounts to about $5,018 million this year (2018). This transaction value is expected to show an annual growth rate of about 17.8% per annum. Currently, Malaysia boasts of about 15.3 million online shoppers. This represents almost 50% of the Malaysian population. 62% of mobile users also use their devices to shop online. High levels of internet and mobile connectivity have made Malaysia have the highest rates of digital and online markets usage. The sector has an estimated transaction value of about $4,733 million making it the biggest sector in Malaysia.
Digital Payments and Online Markets in Malaysia
The online market and digital payment industries are greatly influenced by the growing number of online shoppers. These shoppers are highly motivated by factors such as availability of product reviews, price advantages, and a variety of choices offered by the online platform. They also tend to look for convenience such as free shipping and exclusive deals given by online stores. Thanks to increased mobile and internet penetration, the digital payments sector has seen tremendous growth. In fact, the transaction value in the mobile point-of-sale payments systems amounts to $285 million this year (2018) alone. This translates to a transaction value of about $184.5 per user.
The top three sectors that utilize digital payments and online markets include home and living, health and beauty, and the fashion and accessories industries. 80% of shoppers in the above industries tend to prefer shopping through their mobile phones. Out of these, 54% prefer to pay using online bank transfers, 12% prefer payment on delivery (cash), 1% prefer to use a prepaid account, and 33% prefer using a credit or a debit card. Other supported payment methods include NFC, QR codes, and Bluetooth-based payment transactions. Business models such as business to consumer (B2C) and business to business (B2B) are experiencing rapid growth facilitated by the digital payment and online market industries.
Companies Operating in the Digital Payment and Online Market Industries
SoftSpace is a Malaysian-based digital payments company that focuses on the development of innovative solutions for the e-banking and payment industry. It’s mostly known for enabling merchants to receive payments through mobile phones conveniently and securely through their MPOS (Mobile Point-of-Sale) system. It was founded in March 2012 and currently is active in over 20 operational areas across Southeast Asia. Some of their clients include Hong Leong Bank, CMB Bank Berhad, and MayBank. As of 2014, SoftSpace had deployed over 35,000 card readers and was processing about $1 billion transactions at the time. As of now, the company has deployed over 180,000 card readers across Asia. Apart from Malaysia, SoftSpace operates in Indonesia, Taiwan, Thailand, Vietnam, and the Philippines.
OzoPay is an e-commerce payment platform that enables merchants to process credit and debit card payments along with online banking payments. Their mission is to make online payments simple, seamless, and secure. Merchants who use OzoPay are capable of processing different payment methods, including international Visa or MasterCard debit and credit cards. Currently, OzoPay only operates in Malaysia. They promote internet banking by having partnerships with banks such as MayBank, Kuwait Finance House, Hong Leong Bank, CIMB Bank, Affin Bank, and Alliance bank, among others. This enables them to offer competitive pricing with no hidden fees or monthly costs.
iPayLinks is a Shanghai-based leading cross-border payment service provider in China. It provides a one-stop payment solution for a wide range of sectors such as e-commerce, digital gaming, education merchants, travel, and airlines. Established in 2015, it has since then expanded into other regions such as Kuala Lumpur, New York, London, Hong Kong, and Shenzhen. It has more than 150 employees with over eight offices scattered across the world. Currently, it has over 100 payment channels in over 200 countries. It processes over $100 million transactions per month. The company’s mission is to become a global payment solution and expand its services overseas.
- MyCash Online
MyCash Online is an e-marketplace that is tailor-made for the migrants living and working in Malaysia and Singapore. There are currently 3.3 million migrants who live and work in Malaysia who don’t have access to banking services. They only get paid in cash. The company offers easy, secure, and convenient online services to foreigners who don’t have access to credit or debit cards or online banking. MyCash Online can be used to make purchases for bus and air tickets, to top up mobile credit, to pay bills, and to facilitate cross border mobile remittance. So far, the company has served over 60,000 unbanked customers. It has also conducted over 250,000 transactions worth 3.6 million Malaysia Ringgit.
MOLPay is a leading payment gateway in Southeast Asia that connects international brands to consumers across regions. It was founded in 2005 and has been in operation since then. It has helped clients establish a foundation in the Southeast Asia market by offering various alternative payment methods such as credit or debit cards, e-wallets, online banking, and MOLPay Cash at 7-Eleven. MOLPay has partnered with about 100 banks to enable internet banking. It also facilitates online to offline payment with its partnership with 7-Eleven via MOLPay Cash.
The future of online markets and digital payments in Malaysia is set to thrive. A lot of FinTech companies that support online and digital payments currently run in the Malaysian market with potential for more start-ups to grow. The consumer market is definitely changing and traditional modes of shopping are being challenged due to high internet and mobile penetration. Speaking of digital payments and online markets, we urge you to check out our gold-price backed token, the DinarCoin, which operates on the Ethereum blockchain. DinarCoins are perfect for the Malaysian market as they can be used to make payments online and in various supported stores, and they have the value and investment aspects of gold, with the speed and flexibility of cryptocurrencies. Learn more about the DinarCoin on our official website.