Cash loses ground as digital wallets dominate Malaysia e-commerce

The government is promoting electronic transactions to improve tax compliance.

Digital wallets remained the largest payment method for online shopping in Malaysia in 2025, and are expected to increase to 30% by 2030. 

In 2025, digital wallets accounted for 26% of e-commerce transaction value. It also made up 32% of point-of-sale (POS) transaction value in 2025, although this is forecast to increase to 40% by 2030 as other payment methods grow, according to the Global Payments Report 2026.

The market is led by local providers Touch ’n Go and Boost, alongside Singapore-based GrabPay. 

Global brands Apple Pay, Google Pay and PayPal are also widely used. Consumers mainly use digital wallets for speed, security and convenience, whilst merchants use them to offer in-app discounts and loyalty rewards.

Account-to-account (A2A) payments are expected to gain further ground over the next five years. 

They accounted for 35% of e-commerce transaction value in 2025 and are forecast to reach 40% by 2030. 

At POS, A2A payments represented 14% of transaction value in 2025 and are expected to increase to 16% by 2030.

The growth is supported by Malaysia’s digital payment infrastructure. DuitNow and DuitNow QR continue to expand digital wallet and A2A payments. 

By the end of 2024, DuitNow QR had around 2.6 million acceptance points, whilst FPX processed more than two billion online transactions.

PayNet also allows consumers to pay online merchants directly from their bank accounts. 

Cash remains an important payment method in physical stores despite the shift towards digital payments. It accounted for 22% of POS transaction value in 2025, up from 17% in 2030 forecasts, but down from 64% in 2019. 

The government continues to promote digital payments through its Financial Sector Blueprint, whilst also seeking to reduce cash use to improve tax compliance.

Malaysia’s e-commerce market is projected to grow at a compound annual growth rate (CAGR) of 9% between 2025 and 2030, increasing from $15b to $23b.

The POS market is forecast to grow at a CAGR of 5% over the same period, rising from $145b to $181b.

In e-commerce, credit cards accounted for 16% of transaction value in 2025, followed by debit cards at 9% and cash at 8%. At POS, digital wallets led with 32%, followed by cash at 22%, credit cards at 15%, and both A2A payments and debit cards at 14%.

In the card market, MyDebit held the largest scheme share in 2024 at 36%, followed by Visa at 30% and Mastercard at 25%. American Express accounted for 3%, whilst other schemes made up the remaining 6%.

Malaysia’s digital wallet funding mix is relatively balanced between payment cards and A2A bank account transfers, whilst buy now, pay later (BNPL) services and cash continue to be used to fund wallet transactions.