emerging opportunities in malaysia’s cards and debit card category size and forecast ... 8.2.2...
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www.timetric.com
Emerging Opportunities in
Malaysia’s Cards and
Payments Industry
Market Size, Trends and Drivers,
Strategies, Products and Competitive
Landscape
Product Code: VR0888MR
Published Date: January 2013
TABLE OF CONTENTS
Emerging Opportunities in Malaysia’s Cards and Payments Industry Page 2
© Timetric. This product is licensed and is not to be photocopied Published: January 2013
TABLE OF CONTENTS
1 Executive Summary ..................................................................................................................... 8 2 Market Attractiveness and Future Prospects of Cards and Payment Industry ........................... 10 3 Analysis of Cards and Payment Industry Drivers ...................................................................... 13
3.1 Macroeconomic Fundamentals ..................................................................................................... 13
3.1.1 Stable GDP growth rate ............................................................................................................... 13
3.1.2 Overnight Policy Rate (OPR) ........................................................................................................ 14
3.1.3 Stable unemployment rate............................................................................................................ 15
3.1.4 Malaysian Institute of Economic Research (MIER) consumer sentiments index ................................ 16
3.2 Infrastructure Drivers ................................................................................................................... 17
3.2.1 Launch of secure online shopping platforms .................................................................................. 17
3.2.2 Emergence of contactless payments ............................................................................................. 17
3.2.3 Migration to EMV cards ................................................................................................................ 17
3.2.4 MOLPoints .................................................................................................................................. 18
3.2.5 Launch of mobile money .............................................................................................................. 18
3.3 Business Drivers .......................................................................................................................... 19
3.3.1 Retail industry ............................................................................................................................. 19
3.3.2 Growing mobile commerce ........................................................................................................... 20
3.3.3 Online shopping dynamics............................................................................................................ 21
3.3.4 Outbound travel segment ............................................................................................................. 22
3.4 Card Fraud Statistics ................................................................................................................... 23
3.4.1 By channel .................................................................................................................................. 23
3.5 Regulatory Framework ................................................................................................................. 24
3.5.1 Revised eligibility requirements for credit card issuance ................................................................. 24
3.5.2 Business practice defined by Bank Negara Malaysia for credit cards issuers ................................... 24
3.5.3 Regulations pertaining to credit card infrastructure security ............................................................ 25
3.5.4 E-money regulations .................................................................................................................... 25
4 Emerging Consumer Atti tudes and Trends................................................................................ 27
4.1 Market Segmentation and Targeting ............................................................................................. 27
4.1.1 Retail segment ............................................................................................................................ 28
4.1.2 Corporate segment ...................................................................................................................... 33
4.2 Consumer Preference .................................................................................................................. 34
4.2.1 Price ........................................................................................................................................... 34
4.2.2 Convenience ............................................................................................................................... 35
4.2.3 Services ...................................................................................................................................... 35
4.3 Online Buying Behavior ................................................................................................................ 36
4.4 Preferred Payment Methods ......................................................................................................... 36
5 Competitive Landscape and Industry Dynamics........................................................................ 37
5.1 Market Share Analysis by Payment Channels ................................................................................ 37
5.1.1 Overview of payment channels ..................................................................................................... 37
5.1.2 Credit transfer ............................................................................................................................. 39
5.1.3 Checks........................................................................................................................................ 40
5.1.4 Cards .......................................................................................................................................... 41
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5.1.5 Direct debit .................................................................................................................................. 42
5.2 Debit Cards Market Share ............................................................................................................ 43
5.2.1 By bank....................................................................................................................................... 43
5.2.2 By scheme .................................................................................................................................. 44
5.3 Credit Cards Market Share ........................................................................................................... 45
5.3.1 By bank....................................................................................................................................... 45
5.3.2 By Scheme.................................................................................................................................. 46
5.4 Charge Cards Market Share ......................................................................................................... 47
6 Strategies Adopted by Key Competitors.................................................................................... 48
6.1 Market Entry Strategies ................................................................................................................ 48
6.2 Marketing / Product Strategy ........................................................................................................ 49
6.2.1 Debit cards .................................................................................................................................. 50
6.2.2 Credit cards ................................................................................................................................. 51
6.2.3 Prepaid cards .............................................................................................................................. 53
6.2.4 Charge cards ............................................................................................................................... 54
6.3 Pricing Strategies ........................................................................................................................ 55
7 Market Size and Growth Potential of Payment Card Industry .................................................... 57
7.1 Market Share Analysis by Type of Card......................................................................................... 57
7.2 Total and Forecast of Card Industry Size ....................................................................................... 59
7.2.1 Analysis by number of cards ......................................................................................................... 59
7.2.2 Analysis by transaction value........................................................................................................ 60
7.2.3 Analysis by transaction volume ..................................................................................................... 61
7.3 Debit Card Category Size and Forecast ........................................................................................ 62
7.3.1 Analysis by number of cards ......................................................................................................... 62
7.3.2 Analysis by transaction value........................................................................................................ 63
7.3.3 Analysis by transaction volume ..................................................................................................... 64
7.3.4 Other key performance indicators ................................................................................................. 65
7.4 Prepaid Card Category Size and Forecast ..................................................................................... 66
7.4.1 Analysis by number of cards ......................................................................................................... 66
7.4.2 Analysis by segment – open and closed-loop cards ....................................................................... 67
7.4.3 Analysis by transaction value........................................................................................................ 69
7.5 Charge Card Category Size and Forecast ..................................................................................... 70
7.5.1 Analysis by number of cards ......................................................................................................... 70
7.5.2 Analysis by transaction value........................................................................................................ 71
7.5.3 Analysis by transaction volume ..................................................................................................... 72
7.6 Credit Card Category Size and Forecast ....................................................................................... 73
7.6.1 Analysis by number of cards ......................................................................................................... 73
7.6.2 Analysis by transaction value........................................................................................................ 74
7.6.3 Analysis by transaction volume ..................................................................................................... 75
8 Company Profiles, Product, and Marketing Strategies .............................................................. 77
8.1 Maybank ..................................................................................................................................... 77
8.1.1 Strategies .................................................................................................................................... 77
8.1.2 Maybank key financial .................................................................................................................. 78
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8.2 CIMB .......................................................................................................................................... 79
8.2.1 Strategies .................................................................................................................................... 79
8.2.2 CIMB Bank key financial .............................................................................................................. 80
8.3 RHB Bank ................................................................................................................................... 81
8.3.1 Strategies .................................................................................................................................... 81
8.3.2 RHB Bank key financial ................................................................................................................ 82
8.4 Public Bank (PB) ......................................................................................................................... 83
8.4.1 Strategies .................................................................................................................................... 83
8.4.2 Public Bank key financial .............................................................................................................. 84
9 Appendix ................................................................................................................................... 85
9.1 Methodology................................................................................................................................ 85
9.2 Definitions ................................................................................................................................... 87
9.3 Contact Us .................................................................................................................................. 87
9.4 About Timetric ............................................................................................................................. 87
9.4.1 Our approach .............................................................................................................................. 88
9.5 Services ...................................................................................................................................... 88
9.6 Disclaimer ................................................................................................................................... 89
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LIST OF FIGURES
Figure 1: Current and Future Prospects of Various Cards in Malaysia........................................................................................................ 10 Figure 2: Grow th Potential of Prepaid and Debit Card Transaction Value (%), 2012 and 2017 ................................................................... 11 Figure 3: Grow th Potential of the Malaysian Cards and Payments Industry by Area of Usage .................................................................... 12 Figure 4: Malaysian GDP Grow th Rate (%), Q3-2010–Q3-2012.................................................................................................................. 13 Figure 5: Malaysian Overnight Policy Rate (%), January 2010–November 2012 ......................................................................................... 14 Figure 6: Malaysian Unemployment Rate (%), December 2011–September 2012 ...................................................................................... 15 Figure 7: MIER Consumer Sentiments Index, Q1-2011–Q3-2012 ............................................................................................................... 16 Figure 8: Malaysian Retail Industry (MYR Billion), 2008–2012 .................................................................................................................... 19 Figure 9: Malaysian Smart Phone Penetration (%), 2010–2012 .................................................................................................................. 20 Figure 10: Malaysia Mobile Commerce Sales Dynamics (MYR Billion), 2008–2017.................................................................................... 20 Figure 11: Malaysia Value of Online Shopping (MYR Billion), 2008–2012................................................................................................... 21 Figure 12: Malaysia Outbound Travel Segment Volume (Thousands), 2008–2012 ..................................................................................... 22 Figure 13: Malaysia Card Fraud Statistics (MYR Million), 2008–2012 ......................................................................................................... 23 Figure 14: Malaysian E-Money Regulation Key Points ............................................................................................................................... 25 Figure 15: Malaysian Cards and Payments Industry Segmentation ............................................................................................................. 27 Figure 16: Malaysian Young Population (Million), 2008–2012 ..................................................................................................................... 28 Figure 17: Malaysian Female Population (Million), 2008–2012.................................................................................................................... 29 Figure 18: Cards Targeted at Women in Malaysia ....................................................................................................................................... 29 Figure 19: Malaysian Volume of Outbound Leisure Tourists (Million), 2008–2012...................................................................................... 30 Figure 20: Malaysian Volume of High-Net-Worth Individual (HNWI) Population, 2010–2015....................................................................... 31 Figure 21: Cards Offered to HNWIs ............................................................................................................................................................. 32 Figure 22: Malaysian Volume of Domestic and Outbound Business Tourists (Million), 2008–2012 ............................................................ 33 Figure 23: Consumer Preferences by Card Type......................................................................................................................................... 34 Figure 24: Number of POS Terminals in Malaysia (Thousands), 2008–2017 .............................................................................................. 35 Figure 25: Malaysia Volume of Domestic and Outbound Business Tourists (Million), 2008–2012 ............................................................... 36 Figure 26: Share of Malaysian Payment Channels, (%), 2008 and 2012 ..................................................................................................... 38 Figure 27: Malaysia Value and Growth of Credit Transfer (MYR Million), 2008–2012 ................................................................................. 39 Figure 28: Malaysian Value and Growth of Check Payments (MYR Million), 2008–2012 ............................................................................ 40 Figure 29: Malaysian Value and Growth of Cards Payments (MYR Million), 2008–2012............................................................................. 41 Figure 30: Malaysian Value and Growth of Direct Debits (MYR Million), 2008–2012................................................................................... 42 Figure 31: Malaysian Debit Card Category Share by Bank, (%), 2011......................................................................................................... 43 Figure 32: Malaysian Debit Card Category Share by Scheme, (%), 2011.................................................................................................... 44 Figure 33: Malaysian Credit Card Category Share by Bank, (%), 2011 ....................................................................................................... 45 Figure 34: Malaysian Credit Card Category Share by Scheme, (%), 2011 .................................................................................................. 46 Figure 35: Malaysian Charge Card Category Share by Scheme, (%), 2011 ................................................................................................ 47 Figure 36: List of Foreign Banks Operating in Malaysia ............................................................................................................................... 48 Figure 37: Marketing Strategies Based on Card Type ................................................................................................................................. 49 Figure 38: Co-Branded Credit Cards............................................................................................................................................................ 51 Figure 39: Promotional Credit Card Offers by Public Bank Malaysia ........................................................................................................... 52 Figure 40: Credit Card Pricing Strategy ....................................................................................................................................................... 55 Figure 41: Debit Card Pricing Strategies...................................................................................................................................................... 56 Figure 42: Malaysian Cards Industry by Type of Card, (%), 2008–2017 ...................................................................................................... 58 Figure 43: Malaysia Cards Industry Size by Volume (Thousands), 2008–2017 ........................................................................................... 59 Figure 44: Malaysian Cards Industry Size by Transaction Value (MYR Million), 2008–2017 ....................................................................... 60 Figure 45: Malaysian Cards Industry Size by Transaction Volume (Million), 2008–2017 ............................................................................. 61 Figure 46: Malaysian Debit Card Category Market Size (Thousands), 2008–2017...................................................................................... 62 Figure 47: Malaysian Debit Card Category Market Size (MYR Million), 2008–2017 .................................................................................... 63 Figure 48: Malaysian Debit Card Category Market Size by Transaction Volume (Million), 2008–2017 ........................................................ 64 Figure 49: Debit Card Usage ATMs and POS Terminals (Thousands), 2008–2017 .................................................................................... 65 Figure 50: Malaysian Prepaid Card Category Market Size (Thousands), 2008–2017.................................................................................. 66 Figure 51: Malaysian Open-Loop Prepaid Cards Category Market Size (Thousands), 2008–2017 ............................................................. 67 Figure 52: Malaysian Closed-Loop Prepaid Cards Category Market Size (Thousands), 2008–2017........................................................... 68 Figure 53: Malaysian Prepaid Cards Category Market Size (MYR Million), 2008–2017............................................................................... 69 Figure 54: Malaysian Charge Card Category Market Size (Thousands), 2008–2017 .................................................................................. 70 Figure 55: Malaysian Charge Card Category Market Size (MYR Million), 2008–2017 ................................................................................. 71 Figure 56: Malaysian Charge Card Category Market Size by Transaction Volume (Million), 2008–2017..................................................... 72 Figure 57: Malaysian Credit Card Category Market Size by Volume (Thousands), 2008–2017................................................................... 73 Figure 58: Malaysian Credit Card Category Market Size by Transaction Value (MYR Million), 2008–2017................................................. 74 Figure 59: Malaysian Credit Card Category Market Size by Transaction Volume (Million), 2008–2017....................................................... 75 Figure 60: Malaysian Credit Card Category Market Size by Frequency of Use, 2008–2017........................................................................ 76 Figure 61: Cards Offered by Maybank ......................................................................................................................................................... 77 Figure 62: Cards Offered by CIMB Group With Special Features ................................................................................................................ 79 Figure 63: Cards Offered by RHB Bank With Special Features ................................................................................................................... 81
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Figure 64: Cards Offered by Public Bank With Special Features ................................................................................................................. 83
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LIST OF TABLES
Table 1: Malaysia Payment Channels (MYR Million), 2008–2012................................................................................................................ 37 Table 2: Malaysian Card Industry by Type of Card, (Thousand), 2008–2017 .............................................................................................. 57 Table 3: Malaysian Cards Industry Size by Volume (Thousands), 2008–2017 ............................................................................................ 59 Table 4: Malaysian Cards Industry Size by Transaction Value (MYR Million), 2008–2017 .......................................................................... 60 Table 5: Malaysian Cards Industry Size by Transaction Value (US$ Million), 2008–2017 ........................................................................... 60 Table 6: Malaysian Cards Industry Size by Transaction Volume (Million), 2008–2017 ................................................................................ 61 Table 7: Malaysian Debit Card Category Market Size (Thousands), 2008–2017 ......................................................................................... 62 Table 8: Malaysian Debit Card Category Market Size (MYR Million), 2008–2017........................................................................................ 63 Table 9: Malaysian Debit Card Category Market Size (US$ Million), 2008–2017 ........................................................................................ 63 Table 10: Malaysian Debit Card Category Market Size by Transaction Volume (Million), 2008–2017 ......................................................... 64 Table 11: Malaysian Prepaid Card Category Market Size (Thousands), 2008–2017 ................................................................................... 66 Table 12:Malaysian Open-Loop Prepaid Cards Category Market Size (Thousands), 2008–2017 ............................................................... 67 Table 13: Malaysian Closed-Loop Prepaid Cards Category Market Size (Thousands), 2008–2017 ............................................................ 68 Table 14: Malaysian Prepaid Cards Category Market Size (MYR Million), 2008–2017................................................................................ 69 Table 15: Malaysian Prepaid Cards Category Market Size (US$ Million), 2008–2017................................................................................. 69 Table 16: Malaysian Charge Card Category Market Size (Thousands), 2008–2017.................................................................................... 70 Table 17: Malaysian Charge Card Category Market Size (MYR Million), 2008–2017 .................................................................................. 71 Table 18: Malaysian Charge Card Category Market Size (US$ Million), 2008–2017 ................................................................................... 71 Table 19: Malaysian Charge Card Category Market Size by Transaction Volume (Million), 2008–2017...................................................... 72 Table 20: Malaysian Credit Card Category Market Size by Volume (Thousands), 2008–2017 .................................................................... 73 Table 21: Malaysian Credit Card Category Market Size by Transaction Value (MYR Million), 2008–2017 .................................................. 74 Table 22: Malaysian Credit Card Category Market Size by Transaction Value (US$ Million), 2008–2017 ................................................... 74 Table 23: Malaysian Credit Card Category Market Size by Transaction Volume (Million), 2008–2017 ........................................................ 75 Table 24: Malaysian Credit Card Category Market Size by Frequency of Use, 2008–2017 ......................................................................... 76 Table 25: Maybank Key Financial Indicators, 2010–2011 ............................................................................................................................ 78 Table 26: CIMB Bank Key Financial Indicators, 2010–2011 ........................................................................................................................ 80 Table 27: RHB Bank Key Financial Indicators, 2010–2011.......................................................................................................................... 82 Table 28: RHB Bank Key Financial Indicators, 2010–2011.......................................................................................................................... 84 Table 29: Cards and Payments Key Definitions ........................................................................................................................................... 87
EXECUTIVE SUMMARY
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1 Executive Summary
While cash remains the dominant method of payment in Malaysia, there have been concerted efforts from
issuers, the government and regulatory bodies to support card usage.
The nation’s credit card category has expanded rapidly. A large part of this growth has been driven by
government initiatives, such as a reduction of income requirements for prospective cardholders and minimum
monthly repayments.
All of this has made payment cards far more accessible, resulting in significant growth for the industry. In
2012, the transaction value of debit and credit cards recorded respective growth rates of XX.X% and X.X%
over figures from 2011. The industry value registered a CAGR of XX.XX% during the review period (2008–
2012) growing from MYRXXX.X billion (US$XX.X billion) in 2008 to MYRXXX.X billion (US$XXX.X billion) in
2012.
Strong economic forecasts and consumer confidence will benefit the industry
Over the forecast period (2013–2017), the industry is projected to grow from MYRXXX.X billion (US$XXX.X
billion) in 2013 to MYRXXX.X billion (US$XXX.X billion) in 2017, increasing at a CAGR of X.XX%. The key
drivers for this growth include a rise in disposable income levels, a positive consumer confidence index, a low
inflationary forecast, positive employment opportunities and an increasing volume of corporate and leisure
travelers. Malaysia is also expected to register high growth in terms of online and traditional retail revenues.
E-money / prepaid cards dominate the industry
In volume terms, prepaid cards dominated the industry with more than XX million prepaid cards in circulation
in 2012 compare to only X.X million credit cards and XX.X million debit cards. The Touch ‘n Go transit fare
payment scheme has been in existence since 1997 and acted as a template for the development of
contactless transaction plat forms.
In 2011, Bank Negara reported that the Touch ‘n Go electronic payment system is the most popular cashless
payment mode, handling over XX% of cashless payment t ransactions in the country. Touch ‘n Go processes
over X million transactions on a daily basis and transactions are around three times faster than cash
payments when passing through transit or toll payment points. As of 2012, there were around XX million
Touch ‘n Go cardholders in Malaysia.
In April 2008, Touch ‘n Go incorporated a retail payment functionality into the Touch ‘n Go card, initially for
use at a range of fast-food merchants, cinemas and convenience stores. Since then, retail transactions using
Touch ‘n Go have increased, with XX% taking place in food and beverage outlets.
Growth of contactless and NFC technology
Contactless and mobile payments are being rolled out extensively across Malaysia. In April 2009, the world’s
first commercial near-field-communication (NFC) payment service for mobile phones was launched by Visa in
conjunction with handset maker Nokia and payments facilitator Maybank. The Maxis FastTap service allows
customers use Nokia NFC phones to make contactless transactions at over X,XXX Visa payWave merchant
locations.
Stuart Tomlinson, country manager for Visa Malaysia, said: “Malaysia was the first place in the world where
Visa trialed its Visa payWave technology, so it is only fitting that it is now the first country in the world to offer
Visa payWave on an NFC-enabled mobile phone on a commercial basis.”
EXECUTIVE SUMMARY
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Central bank regulations will reduce credit card volumes
In March 2011, Bank Negara Malaysia (BNM) int roduced new regulation pertaining to the eligibility
requirements of credit cards. These rules limited the issuing of credit cards to those who have an annual
income of MYRXX,XXX (US$X,XXX) or more. Before the introduction of this new regulation, the required
minimum annual income for credit card approval was MYRXX,XXX (US$X,XXX). In addition, the new
regulation limits the number of credit cards each individual can have to two cards for those earning
MYRXX,XXX (US$XX,XXX) or less. These measures are undertaken to prevent mounting credit card debt in
the country. The central bank has also restricted credit limits. According to the new regulation, the maximum
credit limit a cardholder can utilize cannot not be more than two-times his or her monthly income.
Adoption of effective security measures resulted in a low level of card fraud
During the review period, the central bank mandated the use of chip -based automated teller machine (ATM)
cards and EMV standards for credit cards. Moreover, the int roduction of transaction alerts via short message
services (SMS) and the adoption of stronger authentication methods for online t ransactions has resulted in a
decline in the value of card fraud during the review period. In 2012, the value of card fraud was MYRXX.X
million (US$X.X million), registering a declining CAGR of -XX.XX% during the review period.
MARKET ATTRACTIVENESS AND FUTURE
PROSPECTS OF CARDS AND PAYMENT INDUSTRY
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2 Market Attractiveness and Future Prospects of Cards and Payment
Industry
The Malaysian cards and payments industry is expected to register a CAGR of X.XX% over the forecast
period to reach MYRXXX.X billion (US$XXX.X billion) by the end of 2017. Given this growth rate, the industry
offers significant growth opportunities for banks and non-banking card issuers. Over the forecast period,
prepaid cards are expected to grow at a CAGR of XX.XX% as a result of the growth in the open-loop prepaid
card segment which is projected to grow at a CAGR of XX.XX%, to reach MYRX.X billion (US$XXX.X million)
in 2017. Closed-loop cards are expected to grow at a CAGR of XX.XX%.
Figure 1: Current and Future Prospects of Various Cards in Malaysia
Source: Timetric analysis © Timetric
EMERGING CONSUMER ATTITUDES AND TRENDS
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3 Analysis of Cards and Payment Industry Drivers
3.1 Business Drivers
3.1.1 Retail industry
The retail industry is one of the major areas where payment cards are frequently used by consumers. Growth
in the retail sector directly affects transaction values. During the review period, the Malaysian retail industry
increased from MYRXXX.X billion (US$XX billion) in 2008 to MYRXXX.X billion (US$XX.X billion) in 2012 at a
CAGR of X.XX%. The key factors of such growth are low levels of unemployment, rising disposable incomes,
greater purchasing power, a strong travel sector and promotional offers.
Figure 8: Malaysian Retail Industry (MYR Billion), 2008–2012
Source: Timetric analysis © Timetric
EMERGING CONSUMER ATTITUDES AND TRENDS
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3.1.2 Growing mobile commerce
The growth in m-commerce has been enhanced by the increased usage of smartphones, especially in
developing countries such as the Malaysia. The increasing capabilities of smartphone devices, an exponential
rise in mobile device applications and declining prices have been instrumental in driving m-commerce.
Figure 9: Malaysian Smart Phone Penetration (%), 2010–2012
Source: Timetric analysis © Timetric
Figure 10: Malaysia Mobile Commerce Sales Dynamics (MYR Billion), 2008–2017
Source: Timetric analysis © Timetric
While a growing smartphone adoption offers an opportunity for mobile wallet services, fully-fledged support for
this payment plat form will only be possible through a greater acceptance from merchant acquirers. The growth
of m-commerce is expected to drive the growth of the Malaysia cards and payments industry over the forecast
period.
EMERGING CONSUMER ATTITUDES AND TRENDS
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3.1.3 Online shopping dynamics
The growing market for online trade and e-commerce in Malaysia is one of the primary factors responsible for
the expansion of the country’s payment cards industry. Notably, although cash on delivery is emerging as a
preferred mode of payment for online shopping, c redit and debit cards still dominate the industry due to
promotional offers such as discounts, coupons and co -branded cards.
The benefits offered by online retail, such as its low costs and convenience, are expected to further increase
credit and debit card ownership, as these factors encourage consumers to experiment with cashless
purchases.
Figure 11: Malaysia Value of Online Shopping (MYR Billion), 2008–2012
Source: Timetric analysis © Timetric
EMERGING CONSUMER ATTITUDES AND TRENDS
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3.2 Card Fraud Statistics
3.2.1 By channel
The Malaysian central bank has taken number of steps for the safety and efficiency of prominent retail
payment systems and instruments to maintain public confidence in using such systems and instruments.
Operators and card issuers are required to adhere by the regulations including technical security standards,
governance and risk management practices, an adequate transparency including a disclosure on fees and
charges, effective anti-money laundering and the counter financing of terrorism (AML/CFT) measures.
The value of card fraud in Malaysia declined from MYRXX.X million (US$X.X million) in 2008 to MYRXX.X
million (US$X.X million) in 2012 at a CAGR of -XX.XX%. The decrease is mainly resulted from the industry-
wide migration to chip-based automated teller machine (ATM) cards and the EMV standard for credit cards.
Figure 13: Malaysia Card Fraud Statistics (MYR Million), 2008–2012
Source: Timetric analysis © Timetric
COMPANY PROFILES, PRODUCT, AND MARKETING
STRATEGIES
Emerging Opportunities in Malaysia’s Cards and Payments Industry Page 15
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4 Competitive Landscape and Industry Dynamics
Although cash may dominate in terms of payment methods, credit transfers, popularly known as the real-time
electronic transfer of funds and securities system (RENTAS), accounted for XX.X% of non-cash retail
transactions in 2012, according to data from the central bank.
The value of card based t ransactions increased from MYRXXX.X billion in 2008 to MYRXXX.X billion in 2012,
accounting for X.X% of the total market share non-cash payments.
The dominant card scheme in Malaysia is that of Bankcard, an ATM card issued by domestic banking
institutions which also serves as a debit card. In 2008, further efforts to widen the appeal of Bankcard included
incorporating it as a payment option at credit card POS terminals. Focus is now being drawn on the promotion
of Bankcard at government locations and petrol stations.
4.1 Market Share Analysis by Payment Channels
This section explores the market shares of various payment channels and details how these channels have
grown during the review period. The popular payment channels were checks, cash transaction, credit cards
and credit transfers.
4.1.1 Overview of payment channels
The payment channel structure changed significantly during last decade as new transaction methods have
gained in popularity. The most popular payment channel is RENTAS. The share of card payment s increased
from X.X% in 2008 to X.X% in 2012.
Table 1: Malaysia Payment Channels (MYR Million), 2008–2012
Payment Channels MYR Million, 2008 Market Share (%), 2008 MYR Million, 2012 Market Share (%), 2012
Credit transfer XX,XXX,XXX.X XX.X% XX,XXX,XXX.X XX.X%
Check payments X,XXX,XXX.X X.X% X,XXX,XXX.X X.X%
Cards payments XXX,XXX.X X.X% XXX,XXX.X X.X%
Direct debit XXX.X X.XXXX% X,XXX.X X.XXXX%
Total XX,XXX,XXX.X XXX.X% XX,XXX,XXX.X XXX.X%
Source: Timetric analysis © Timetric
COMPANY PROFILES, PRODUCT, AND MARKETING
STRATEGIES
Emerging Opportunities in Malaysia’s Cards and Payments Industry Page 16
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5 Market Size and Growth Potential of Payment Card Industry
While cash remains the dominant method of payment in Malaysia, there have been concerted efforts from
issuers, the government and regulatory bodies to support card usage.
The credit card category has expanded rapidly, and a large part of this growth has been driven by government
initiatives such as the reduction of the income requirement for prospective cardholders and reducing the
minimum monthly repayment levels.
This has made payment cards far more accessible. In July 2011, consumer discounts were offered at selected
merchants and saw MasterCard report a XX% increase on credit and debit card expenditure, reaching US$XX
million.
While a large amount of this spending undoubtedly came from tourists from either Singapore or Hong Kong, it
is a significant illustration of how the use o f plastic has become increasingly mainstream in a country that is
still predominantly rural.
5.1 Market Share Analysis by Type of Card
Debit cards continue record strong growth rates, registering a review period CAGR of XX.XX% in volume
terms and a CAGR of XX.XX% in terms value in 2012.
In 2012, the volume of ATM withdrawals using debt card increased from XXX.X million in 2008 to XXX.X
million.
Charge cards accounted for only X.XX% of the total payment cards industry in 2012. For credit cards, over
XXX.X million transactions valued at MYRXX.X billion (US$XX.X billion) were carried out in 2012, an increase
of XX.X% and XX.X% respectively over figures from 2008.
Contactless cards are also gaining in popularity – eight issuers offer contactless cards in Malaysia, which can
be used at more than X,XXX merchants.
Table 2: Malaysian Card Industry by Type of Card, (Thousand), 2008–2017
Types of Card: 2008 2012 2013 2017 CAGR 2008–2012 CAGR 2013–2017
Debit card XX,XXX.X XX,XXX.X XX,XXX.X XX,XXX.X XX.XX% X.XX%
Credit card XX,XXX.X X,XXX.X X,XXX.X X,XXX.X -X.XX% -X.XX%
Prepaid card XX,XXX.X XX,XXX.X XXX,XXX.X
XXX,XXX.X XX.XX% X.XX%
Charge card XXX.X XXX.X XXX.X XXX.X -XX.XX% -X.XX%
Total XX,XXX.X XXX,XXX.X XXX,XXX.X XXX,XXX.X X.XX% X.XX%
Source: Timetric analysis © Timetric
COMPANY PROFILES, PRODUCT, AND MARKETING
STRATEGIES
Emerging Opportunities in Malaysia’s Cards and Payments Industry Page 17
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5.2 Total and Forecast of Card Industry Size
Card categories in Malaysia grew marginally both in value and volume terms during the review period. The
cumulative average growth rate of the market size in volume terms is expected to grow by over X.XX% over
the forecast period. The cumulative average growth rate in value terms is also expected to grow by nearly
X.XX%.
5.2.1 Analysis by number of cards
The industry grew at a CAGR of X.XX% in volume terms during the review period and is forecast to post a
projected CAGR of X.XX% over the forecast period. The growth in the volume of closed-loop and open-loop
prepaid cards is expected to drive industry growth.
Table 3: Malaysian Cards Industry Size by Volume (Thousands), 2008–2017
2008 2009 2010 2011 2012 CAGR 2008–2012
Total Cards – Historical XX,XXX.X XXX,XXX.X XXX,XXX.X XXX,XXX.X XXX,XXX.X X.XX%
2013 2014 2015 2016 2017 CAGR 2013–2017
Total Cards – Forecast XXX,XXX.X XXX,XXX.X XXX,XXX.X XXX,XXX.X XXX,XXX.X X.XX%
Source: Timetric analysis © Timetric
Figure 43: Malaysia Cards Industry Size by Volume (Thousands), 2008–2017
Source: Timetric analysis © Timetric
COMPANY PROFILES, PRODUCT, AND MARKETING
STRATEGIES
Emerging Opportunities in Malaysia’s Cards and Payments Industry Page 18
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5.2.2 Analysis by transaction value
The category size by transaction value, grew at a CAGR of XX.XX% during the review period from
MYRXXX.X billion (US$XX.X billion) in 2008 to MYRXXX billion (US$XXX.X billion) in 2012. The overall
category size by value is expected to grow at a CAGR of X.XX%, from MYRXXX.X billion (US$XXX.X billion)
in 2013 to MYRXXX.X billion (US$XXX.X billion) in 2017. Such growth will be driven by an increasing demand
for prepaid instruments.
Table 4: Malaysian Cards Industry Size by Transaction Value (MYR Million), 2008–2017
2008 2009 2010 2011 2012 CAGR 2008–2012
Total Cards – Historical XXX,XXX.X XXX,XXX.X XXX,XXX.X
XXX,XXX.X XXX,XXX.X XX.XX%
2013 2014 2015 2016 2017 CAGR 2013–2017
Total Cards – Forecast XXX,XXX.X XXX,XXX.X XXX,XXX.X XXX,XXX.X XXX,XXX.X X.XX%
Source: Timetric analysis © Timetric
Table 5: Malaysian Cards Industry Size by Transaction Value (US$ Million), 2008–2017
2008 2009 2010 2011 2012 CAGR 2008–2012
Total Cards – Historical XX,XXX.X XX,XXX.X XXX,XXX.X XXX,XXX.X XXX,XXX.X XX.XX%
2013 2014 2015 2016 2017 CAGR 2013–2017
Total Cards – Forecast XXX,XXX.X XXX,XXX.X XXX,XXX.X
XXX,XXX.X XXX,XXX.X X.XX%
Source: Timetric analysis © Timetric
Figure 44: Malaysian Cards Industry Size by Transaction Value (MYR Million), 2008–2017
Source: Timetric analysis © Timetric
COMPANY PROFILES, PRODUCT, AND MARKETING
STRATEGIES
Emerging Opportunities in Malaysia’s Cards and Payments Industry Page 19
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5.2.3 Analysis by transaction volume
In terms of transaction volume, the Malaysian cards and payments industry grew at a CAGR of X.XX% during
the review period, from XXX.X million transactions in 2008 to X.X billion t ransactions in 2012. Debit cards and
prepaid cards transaction remained the key driver of such growth. Over the forecast period, the transaction
volume of total cards is expected to grow at a CAGR of X.XX% to reach X.X billion by the end of 2017.
Table 6: Malaysian Cards Industry Size by Transaction Volume (Million), 2008–2017
2008 2009 2010 2011 2012 CAGR 2008–2012
Total Cards – Review XXX.X XXX.X XXX.X XXX.X X,XXX.X X.XX%
2013 2014 2015 2016 2017 CAGR 2013–2017
Total Cards – Forecast X,XXX.X X,XXX.X X,XXX.X X,XXX.X X,XXX.X X.XX%
Source: Timetric analysis © Timetric
Figure 45: Malaysian Cards Industry Size by Transaction Volume (Million), 2008–2017
Source: Timetric analysis © Timetric
APPENDIX
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6 Appendix
6.1 Methodology
All Timetric cards and payments reports are created by following a comprehensive, four -stage methodology.
This includes market study, research, analysis and quality control.
1) Market Study
A. Standardization
Definitions are specified using recognized industry classifications. The same definition is
used for every country.
Annual average currency exchange rates are used for the latest completed year. These
are then applied across both the historical and forecast data to remove exchange rate
fluctuations.
B. Internal audit
Review of in-house databases to gather existing data:
Historic market databases and reports
Company database
C. Trend monitoring
Review of the latest cards and payments companies, and industry trends
2) Research
A. Sources
Collection of the latest market-specific data from a wide variety of industry sources:
Government statistics
Industry associations
Company filings
International organizations
Cards and payments regulatory agencies
B. Expert opinion
Collation of opinion taken from leading cards and payments industry experts
Analysis of third-party opinion and forecasts:
Broker reports
Media
Official government sources
C. Data consolidation and verification
Consolidation of data and opinion to create historical datasets
Creation of models to benchmark data across sectors and regions
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3) Analysis
A. Market forecasts
Feeding forecast data into market models:
Macroeconomic indicators
Industry-specific drivers
Analysis of cards and payments industry database to identify trends:
Latest cards and payments trends
Key drivers of cards and payments industry
B. Report writing
Analysis of market data
Discussion of company, and industry trends and issues
Review of financial deals, and cards and payments trends
4) Quality Control
A. Templates
Detailed process manuals
Standardized report templates and accompanying style guides
Complex forecasting tool used to ensure forecast methodologies are consistently applied
Quality-control checklists
B. Quality control process
Peer review
Senior-level QC
Random spot checks on data integrity
Benchmark checks across databases
Market data cross-checked for consistency with accumulated data from:
Company filings
Government sources
APPENDIX
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6.2 Definitions
Table 29: Cards and Payments Key Definitions
Category Description
Gift cards Cards suitable for purposes such as key religious festivals or on occasions such as marriages and
birthdays. The gift card can also be used by businesses as gifts to employees, vendors or clients.
Meal cards
Cards specif ically designed to replace paper voucher systems, offering employees a meal
allow ance and eliminating logistical problems associated with procurement, stock-keeping and
distribution of paper-based meal vouchers.
Payroll cards
Cards used to pay salaries to employees, eliminating the need to credit funds into a specif ic bank
account. The payroll card is loaded w ith the salary or reimbursement due, w hich can then be spent
by the recipient using the card.
Travel currency cards Cards targeting international travelers, generally available in multiple currencies.
Remittance cards Cards targeting users who receive remittances from abroad.
Multi-purpose prepaid cash card Cards that can be used to purchase various goods and services from aff iliated merchants.
Average transaction value The average value of transactions made through each card in a year.
Frequency of use The average number of transactions made per card in a year.
Turnover per card The value of transactions generated by a card in a year.
Online spending through mobile Transactions made though mobile payment options.
Card penetration (per '000) The average number of various card available per thousand people.
Contactless cards The total number of NFC-enabled cards in circulation.
Source: Timetric analysis © Timetric
6.3 Contact Us
If you have any queries about this report, or would like any further information, please contact
6.4 About Timetric
Timetric is an innovative, fast-growing economic and business research firm that provides critical intelligence
on emerging economies and key global industries. We provide detailed independent economic and sector
research, business insights and authoritative, independent commentary, all delivered using sophisticated
content delivery and data visualization technologies.
We collect data through an extensive primary and secondary research network using robust methodologies,
and highly innovative data acquisition and storage technologies. Our highly qualified teams of economists and
analysts draw on their collective industry experience to deliver analysis, comment, opinion and advic e on the
latest country and market trends and conditions. We provide extensive data services and commentary to
influential business media operations around the globe.
The Timetric product team is based in London, San Francisco, Hyderabad, Sydney and Singap ore, and
consists of over 300 economists, analysts, journalists and researchers and a team of 40 software engineers.
APPENDIX
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6.4.1 Our approach
All of Timetric’s products and services are founded on three key principles:
High-quality data
All our services are grounded in high-quality data. We collect data in a number of innovative ways, including
extensive business and consumer surveys conducted via our sophisticated market research technology,
exclusive industry research programs and models, the systematic collection and curation of huge public data
sets such as national statistics sites, regulatory filings and procurement databases, mining of business and
government ‘exhaust data’, plus analysis of business and social media sentiment.
Combined, the Timetric data assets consist of well over 1 billion time series and tens of billions of data points,
creating a powerful resource for our data models, forecasts and analysis.
Expert analysis
Our intelligence services are provided by in-house teams of economists, analysts and researchers, working
for programs that are guided by global advisory boards of leading economists and industry advisors. Our
analysts collectively have decades of research experience and pedigrees from leading institutions.
Timetric analysis draws on high-quality data sources, including proprietary panel and survey data, and is
grounded in proprietary data analysis methodologies, analysis frameworks and forecasts.
Powerful delivery and visualization tools
We understand that our users want to spend more time analyzing information than finding it, so we have
created a highly intuitive and extremely responsive user interface that organizes data in subject -specific
modules, coupled with powerful search and index technologies to enable data to be easily found, classified
and cross-referenced. The Timetric interface is designed by specialized UI experts, and built on a platform
constructed specifically to enable fast, powerful access, visualizations and analytics of big data and content
sets.
6.5 Services
Timetric offers a range of economic, industry and consulting services.
Economic intelligence services
Timetric uses its extensive data assets, through the use of innovative technology, in order to produce thought -
provoking analytical content delivered in the form of economic briefing services. We also enable users to
access the data components that power this analysis, so that they can understand further, dig deeper or
create their own assessments.
Industry intelligence
Our industry Intelligence Centers are premium web-based services that provide access to interactive tools,
comprehensive research and expert analysis in key industry sectors. They provide invaluable decision support
presented in an easily digestible format and grounded in deep research.
Consulting
Timetric specializes in the development and delivery of innovative research solutions that are designed to
provide competitive advantage and profitability to our clients. Our cutting -edge research processes, ground-
breaking technology, and expert researchers and analysts can be employed to produce timely, cost -effective,
insightful and actionable recommendations to support growth strategies.
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6.6 Disclaimer
All rights reserved.
No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form by any
means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the
publisher, Timetric.
The facts of this report are believed to be correct at the time of publication but cannot be guaranteed. Please
note that the findings, conclusions and recommendations that Timetric delivers will be based on information
gathered in good faith from both primary and secondary sources, the accuracy of which Timetric is not always
in a position to guarantee. Timetric will accept no liability whatsoever for actions taken based on any
information that may subsequently prove to be incorrect.