IPSOS Malaysia: Non-cash payments dip in 2023 amid COVID, yet 51% Malaysians favor digital transactions

MALAYSIA: Following the acceleration of COVID, IPSOS Malaysia reports a slight decrease in the usage of non-cash payment methods in 2023.

Despite this downturn, IPSOS Malaysia’s chief client officer Pakee Charoenchanaporn and research manager Atticus Poon emphasize that half of Malaysians continue to rely on non-cash payments, with e-wallets being used by one-fourth of the population.

In January, IPSOS Malaysia revealed that over the last three months, 51% of Malaysians opted for cashless payment methods, reflecting a 4% decrease since 2022.

While there is an overall decline in non-cash payment usage, online banking and debit cards persist as the preferred choices among Malaysians, comprising 35% of the total.

E-wallets, ranking as the third most favored option, account for 26%.

A discernible shift toward online banking is observed among the younger demographic, aged 18–24, experiencing a 9% increase, reaching 39% in online bank transfer usage.

Conversely, individuals in the 25 to 44 age group show a decrease in the adoption of both online banking and e-wallets.

However, there is a slight uptick in the usage among those aged 45-74 years old, with a 1% increase to 23% in online banking and a 3% increase to 19% in e-wallet usage from 2022.

IPSOS unveils surging daily e-wallet transactions

Since 2021, there has been a consistent trend among e-wallet users, with the majority limiting themselves to utilizing a maximum of two different e-wallet apps, according to IPSOS.

In 2023, there is a noticeable surge in the frequency of e-wallet usage, with a quarter of users employing e-wallets on a daily basis—an increase of 15% since 2022.

Breaking down the usage patterns, 26% of individuals utilize e-wallets every day, marking a significant rise.

Additionally, 50% opt for weekly usage, 19% prefer a monthly frequency, and 5% engage with e-wallets every 2–3 months.

The primary purposes for e-wallet usage continue to revolve around toll and parking payments, with F&B outlets and food delivery following closely behind; notably, retail purchases have slipped from the top three positions.

“The use of e-wallets for retail purchases has decreased as people have returned to physical stores and may prefer using cash or other forms of payment,” they said.

Interestingly, there is a growing trend in the use of e-wallets for money transfers, indicating a shift towards e-wallets replacing traditional online banking methods for financial transactions.

As the number of daily e-wallet users increases, Maybank MAE emerges as a prominent player, securing the second position among e-wallet brands with a 46% market presence—second only to Touch n’ Go, which dominates with an 88% user base.

“Overall, the usage of e-wallets among Malaysians is expected to continue, with more individuals adopting e-wallets as their primary payment channel in their daily lives,” stated IPSOS Malaysia.

The market research company, IPSOS, which operates in 90 markets globally, conducted the study over the last three months of 2023, involving 1,015 respondents aged 18-74 years old in Malaysia.