Payments Snapshot in Malaysia - Coronavirus (COVID-19) Sector Impact
Summary The Coronavirus (SARS-CoV-2) outbreak, dubbed COVID-19, is first and foremost a human tragedy, affecting millions of people globally. The contagious Coronavirus, which broke out at the close of 2019, has led to a medical emergency across the world, with the World Health Organization officially declaring the novel Coronavirus a pandemic on March 11, 2020.
Malaysia’s GDP has been revised downward for 2020 due to the economic disruption caused by Coronavirus. With the government now easing lockdown restrictions, and allowing businesses to reopen in a phased manner, a rise in consumer and commercial spending is expected, which in turn will support the payments market.
The rising demand for non-cash payments is expected to drive card payments at POS terminals and will result in a meagre growth in ATM cash withdrawals. As per our revised forecasts, the number of card payments will grow by 8.5% in 2020 while ATM cash withdrawals will rise by just 0.8%.
This report focuses on the impact of the coronavirus outbreak on both the economyand the cards and payments industry in Malaysia.Based on our proprietary datasets, the snapshotprovides a detailed comparison between pre-COVID-19 forecasts andrevised forecasts of total payment card, debit card, and credit and charge card transactions by value and volume.
It also offers information on measures taken by the government to combat coronavirus.
Scope - Coronavirus has adversely affected the Malaysian travel and tourism industry. As part of stimulus efforts, the government is offering several benefits such as an exemption from the 6% service tax for hotels between March and August 2020 as well as personal income tax relief of up to MYR1,000 ($244) on expenditure related to domestic tourism. As part of easing lockdown restrictions from June 10, the government allowed inter-state travel. On July 21 the government decided to partially reopen its borders for medical tourists. These developments will help revive Malaysia’s tourism sector, and increased consumer spending will benefit the payment card market.
- The overall decline in consumer spending will partially be offset by a rise in online spending as wary consumers stay at home and use online channels to purchase goods. Consumers in locked-down and high-risk areas will shift from in-store to online spending to avoid exposure to potential disease vectors. Online retailers such as Tesco, Happy Fresh, MyGroser, Mydin, MyFishman, Redtick, BMS Organic, Pantry Express, and Signature Market are allowing consumers to purchase essential items online for delivery on the same day.
- Additionally, when shopping in-store, consumers will shift from cash-based payments to digital payment tools, particularly mobile wallets - again, to avoid exposure to potential disease vectors such as cash and POS terminals. As a result, the use of mobile phones for payments is expected to become even more popular in Malaysia, and wallets like DuitNow QR, GrabPay, FavePay, and MPay are likely to do well going forward as a result of this outbreak.
Reasons to Buy - Make strategic decisions using top-level revised forecast data on the Malaysian payment industry.
- Understand the key market trends, challenges, and opportunities in the Malaysian cards and payments industry.
- Receive a comprehensive insight into payments market in Malaysia.
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