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Malaysia’s Real-Time Payments Transactions Surge by 864% in 2020

Updated 19 Apr 2021 – By Team Loanstreet

More than 68 million (mn) real-time payments transactions were processed in Malaysia in 2020, a surge of 864% compared to the previous year (7mn), as the COVID-19 pandemic dramatically accelerated trends away from cash towards greater reliance on real-time and digital payments, a new global report from ACI Worldwide (NASDAQ: ACIW) and GlobalData reveals. 

The second instalment of ‘Prime-Time for Real-Time,’ first launched in 2020, analyses global real-time, account-to-account payment volumes and forecasts across 48 global markets. It projects a Compound Annual Growth Rate (CAGR) for real-time payments of 83.91% in Malaysia from 2020 to 2025.
Although it is less than two years old, Malaysia’s real-time payments network already boasts a robust infrastructure and numerous supporting banks, PSPs and merchants. DuitNow, which enables users to transfer funds instantly with a mobile number or national ID, was launched in 2018 by the national payments network and central infrastructure provider, Payments Network Malaysia (PayNet), in collaboration with ACI Worldwide.

With millions of people globally having to change the way they work and live - and the way they shop and pay - new technologies are growing rapidly.

Mobile wallet transaction volume rose 171% in 2020 in Malaysia. Countries like Brazil, Mexico and Malaysia, where many people historically relied on cash, are now some of the fastest adopters of mobile wallets.

As the pandemic continues to drive changes in consumer and business behaviours, banks, merchants and intermediaries across the payment ecosystem in Malaysia are responding rapidly, prioritising the shift to digital to protect current revenue streams, and searching for new ones through a fully digitised customer experience. 

“The pandemic has cast the spotlight on the importance of digital payments and robust payment infrastructures, condensing a decade of anticipated innovation into one year and creating human behavioural changes that will not reverse as we emerge from the crisis,” commented Jeremy Wilmot, chief product officer, ACI Worldwide.

“Countries with a robust digital payments infrastructure already in place have coped better than those without when it comes to containing the economic impact of the pandemic. Real-time payments have enabled governments, working jointly with financial institutions, to accelerate much-needed disbursements and economic stimulus payments to their citizens. They have also enabled real-time liquidity to businesses that had to adapt to disrupted supply chains.”

“Real-time payments are still in a nascent stage worldwide, and mostly focused on the obvious use-case of P2P payments in many countries,” said Samuel Murrant, Lead Analyst, Payments, GlobalData. “However, the pandemic has provided an opportunity to accelerate the growth path for these instruments. As consumers become used to the speed of real-time settlement for P2P payments, they will naturally move to use them for e-commerce over the relatively slower and less convenient process of using cards online. From there, there is potential to move into in-store payments, once enough consumers recognize real-time payment brands and the user base is high enough to deliver sufficient value to merchants.”

Here's the summary of Key Findings:

Malaysia real-time payments growth:
  • The total number of real-time transactions in 2020 was 68.74 mn, up 864% from 7.13 mn in 2019. This is expected to grow to 1.45 billion (bn) by 2025
  • The real-time share of Malaysian electronic transactions in 2020 was 1.9%, up from 0.2% in 2019; it is predicted to be 16.5% by 2025
  • The value of real-time transactions in Malaysia was up by 908% from 2019 rising from US$550 mn to US$5.55bn; the expected CAGR by 2025 is 96.04%.
  • Mobile wallet transaction volume rose 171% in 2020 in Malaysia.

Global real-time payments growth:
  • The total number of real-time transactions in 2020 was 70.3 bn, up 41% from 50.0 bn in 2019
  • The real-time share of global electronic transactions in 2020 was 9.8%, up from 7.6% in 2019; it is predicted to be 17.4% by 2025
  • The value of real-time transactions was up by 32.8% from 2019 rising from US$69 trillion (tn) to $92tn; the expected CAGR by 2025 is 12%.

Top 10 countries globally by a number of real-time transactions in 2020:
  • India retains the top spot with 25.5bn real-time payments transactions, followed by China with 15.7bn transactions; South Korea is in 3rd place with 6.0bn, Thailand 4th with 5.2bn and UK is in 5th place with 2.8bn
  • Nigeria follows up in 6th place with 1.9bn transactions, Japan in 7th with 1.7bn 
  • Brazil climbs into the global top 10 as number 8 due to the launch of PIX, with 1.3bn transactions driving a 58% YoY increase from 2019 to 2020. Expect to see the country climbing even higher next year with a 5-year growth prediction of 25.3% CAGR
  • The US ranks number 9 with 1.2bn transactions and Mexico ranks 10 with 942mn.

Fastest growing countries for real-time payments:
  • The top spot goes to Croatia with an expected CAGR of 374.4% between 2020 and 2025, followed by Colombia (112.7%), Malaysia (83.9%), Peru (74.4%) and Finland (71.4%) 
  • The highest growth region (CAGR 2020-2025) is predicted to be North America (36.5%), as both Canada and the US modernize and drive their new real-time systems (RTR and FedNow)

Global mobile wallet adoption: 
Mobile wallet adoption rose to a historic high of 46% in 2020, up from 40.6% in 2019 and 18.9% in 2018
Total mobile wallet transactions amounted to 102.7 bn in 2020 and are expected to reach 2,582.8 bn by 2025 

Payments fraud: 
Globally, card-related fraud remains highest in terms of reported incidents from consumers, but fraud incidents associated with real-time payments were on the rise from 2019 to 2020 as fraudsters tend to target new channels
Real-time payments scams that were on the rise include: confidence tricks (12.5% rising to 13.7%), Identity theft (6% rising to 11.6%) and digital wallet account hacks (4.4% rising to 6.2%)

*The above article is intended for informational purposes only. Loanstreet accepts no responsibility for loss that may arise from reliance on information contained in the articles.
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