Malaysian consumers’ way of paying is gradually being reshaped as the country rapidly embraces cashless payments, according to a new report.
Data compiled by Ipsos Malaysia in its Non-cash Economy & the Role of E-wallets report showed that in 2025, nearly three in five Malaysians used digital payment methods, marking a turning point away from cash and spotlighting financial tools that are gathering steam amidst the country’s efforts to develop its digital economy.
While there have been numerous payment methods introduced in recent years, not all are benefiting equally. E-wallets surged ahead as Malaysia’s fastest-growing payment method last year, with usage jumping 14%. Citizens between the age group of 18 and 34 were recognized as the driving force behind this growth, utilizing e-wallets for the majority of their food and beverage transactions (75%) and retail purchases (65%).
Meanwhile, online bank transfers came in a close second with an 11% increase in adoption, with the 35-44 age group at the forefront of this development.
In contrast, traditional debit and credit cards ranked as the least used payment options among locals despite the digital shift. Ipsos Malaysia stated that card payments are being used for fewer, high-value purchases, unlike e-wallets, which dominate everyday spending.
This only shows that more people now prefer mobile and instant payments, a trend that could reduce the dominance of card networks in Malaysia.
Previous market estimates by GlobalData stated that the country’s card payment market will expand 4% to reach MYR814.1 billion ($177.9 billion) by 2025, supported by broader merchant acceptance and contactless technology. The value of card payments had already ballooned at an 8% compound annual growth rate (CAGR) between 2020 and 2024, reaching MYR783 billion ($171.1 billion).
On the other hand, cash is steadily losing ground, with ATM withdrawals accounting for merely 49.8% of the market in 2025, down sharply from 63.3% in 2021, underscoring a behavioral shift driven by convenience, mobile connectivity, and widespread acceptance of QR-based payments in retail and other services.
Malaysia recently signed an agreement with India’s NPCI International Payments Limited that would link the DuitNow QR system with the popular Unified Payments Interface (UPI), an initiative that is projected to further drive Kuala Lumpur’s fintech ecosystem.
While Malaysia’s shift toward digital payment systems is a cause for celebration, it also presents risks for banks and fintech companies. Many institutions that once depended on fees from card transactions now need to adjust to the evolving financial landscape to ensure their survival.
Watch: The quiet rise of blockchain in mainstream finance
Source: https://coingeek.com/malaysia-accelerates-shift-from-cash-to-digital-payments/