Despite its small size and population—just over 574,000 people—the island nation of Malta is a major financial center, and it’s home to several large banks and other financial institutions. Malta has a well-developed payments infrastructure, and a variety of payment methods are available to customers and businesses.

The Maltese payment sector includes a high level of regulatory rigor, and businesses must use Strong Customer Authentication (SCA). As a member of the European Union, Malta also adheres to the revised Payment Services Directive (PSD2), which shapes the operations of payments service providers, financial institutions, and ecommerce businesses.

Financial services in Malta include traditional banking institutions and specialized fintechs, resulting in a resilient industry with a regulatory framework that promotes improvement and security.

Below, we’ll explain what businesses that plan on entering Malta’s payment market should consider, including:

• Embracing local preferences
  
• Complying with regulatory standards
  
• Maintaining strong security infrastructure
  

The state of the market

The most common payment method in Malta is cash. However, the use of electronic payments is growing rapidly, and several different electronic payment methods are widely accepted. Credit cards are the most widely accepted electronic payment method in Malta, and most businesses accept all major credit cards, including Visa, Mastercard, American Express, and Diners Club.

Debit cards are also widely accepted in Malta, as are prepaid cards, which can be used to make purchases at any business that accepts credit or debit cards.

The use of mobile payments has grown in Malta, particularly among younger, tech-savvy customers. A 2018 Central Bank of Malta survey found that mobile payments were the second most cited payment method for consumables (i.e., items that can be used up) and the top choice for nonconsumables (i.e., items that can be reused). The transaction value of the mobile point-of-sale (POS) payment market in Malta is expected to be $1.11 billion in 2025. This reflects growing customer acceptance as well as a higher confidence in the security and reliability of mobile payment options.

Government regulations shape cash’s role in Malta’s economy. Regulatory initiatives favor electronic transactions to increase transparency and combat financial fraud. Tax authorities offer incentives for card payments to encourage their use. Malta has also imposed limitations on cash payments for specific transactions to mitigate money laundering risks, and cash payments that exceed €10,000 are prohibited. These regulations match broader EU directives and reflect a concerted effort to promote electronic payments.

Payment methods

While cash is still the most preferred payment method in Malta, customers use various payment methods. Here’s an overview.

Current usage

In 2022, cash accounted for 77% of POS transactions in Malta, the highest percentage of all the European nations included in a European Central Bank report. However, digital wallets and mobile payments have gained popularity, with about a quarter of peer-to-peer payments occurring via cellular. The proliferation of contactless payments and QR code technology has facilitated this transition away from cash.

Credit cards are accepted across Malta, both in cities and in rural areas. Credit and debit cards combined accounted for 26% of POS transaction value in 2022. Additionally, the high rate of internet access in Malta—over 95% of Maltese suburban households had access to the internet in 2024—correlates with the widespread adoption of online shopping and online card payments.

Contactless payments have also seen steady growth in Malta, a trend that accelerated during the COVID-19 pandemic. According to data from the European Central Bank, the share of contactless transactions in all POS card payments jumped from 39% in 2019 to 74% in 2022.

Popular B2C payment methods in Malta

• Cash
  
• Credit cards
  
• Debit cards
  

Popular B2B payment methods in Malta

• Credit cards
  
• Bank transfers
  

Emerging trends

Malta’s proactive approach to adopting financial technology solutions, including blockchain, is similar to that of advanced markets such as Singapore and the United Kingdom.

Ease and friction of entry

In addition to traditional banks, Malta is home to a growing number of financial service providers. Here’s how to operate in this market.

Taxes

In Malta, value-added tax (VAT) is 18% for most goods and services, although there are reduced rates for specific categories. Furthermore, necessities such as food aren’t subject to VAT. While customers bear the immediate burden of VAT when they make purchases, businesses are responsible for collecting and remitting VAT to the government. Proper VAT compliance is necessary, and late or improper remittance can result in steep fines and potential audits.

Chargebacks and disputes

Malta’s stance on chargebacks and disputes favors consumer protection. It’s influenced by both EU regulations and domestic laws, which require businesses to prove the legitimacy of a transaction. This is particularly relevant in cases of unauthorized transactions, where proving a transaction’s authenticity can be challenging. Businesses must verify transactions and maintain thorough documentation to minimize the financial impact of disputes.

Malta follows PSD2, which mandates SCA. SCA can influence the outcome of chargeback disputes, as the level of verification at the time of the transaction can be cited as evidence in resolutions.

Malta also complies with Single Euro Payments Area (SEPA) regulations, which specifically require that customers receive refunds for direct debit transactions if they request them within eight weeks.

International payments

Malta’s payment market works with global markets in several ways, reflecting shared consumer preferences and regulatory frameworks. Here’s a closer look.

• Currency conversion
  Tourists from countries outside the eurozone often convert their currencies at financial institutions or specialized currency exchange centers. These entities typically apply exchange rate markups, which range from 1%–3%. Some banks might also charge a flat fee for currency conversion, usually in the range of €2–€10. Automated teller machines (ATMs) in Malta might offer cardholders the option to withdraw cash in foreign currencies, with service fees ranging from €2–€5 per transaction.

• Malta’s role as part of SEPA
  SEPA simplifies euro-denominated bank transfers and facilitates cross-border transactions within the eurozone, making it easier for customers and businesses in Malta to engage with their European counterparts.

• Trade partnerships
  Aside from its most significant relationships with its fellow EU member countries, Malta holds key trade relationships with the UK, which includes financial services and ecommerce transactions, and Italy, which has significant areas of overlap with Malta’s financial services.

Security and privacy

Malta emphasizes security, compliance, and regulatory factors in its payment sector to stay aligned with EU guidelines and directives. Here’s what you can expect.

• Data protection laws
  Malta adheres to the General Data Protection Regulation (GDPR), an EU-wide regulation that sets rigorous standards for customer data protection. The GDPR mandates that entities get explicit consent for data collection and grants customers the right to request that their data be erased—also known as the “right to be forgotten.”

• Malta Financial Services Authority (MFSA) oversight
  The MFSA is the principal regulatory authority that oversees financial services, including payment institutions and electronic money institutions. It enforces compliance with EU regulations, supervising adherence to established standards.

• Financial Intelligence Analysis Unit (FIAU)
  The FIAU is Malta’s central agency for the prevention of financial crimes, including money laundering and terrorism financing. It monitors, investigates, and disseminates information related to suspicious transactions.

• Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT)
  Malta adheres to the EU’s AML and CFT directives. Financial institutions must implement systems to monitor and report potentially suspicious activities, with stringent penalties for noncompliance.

Key success factors

Malta’s payment space includes certain barriers to entry, such as slow adoption of technology, regulatory compliance requirements, and complicated international transactions outside the EU. Businesses should be prepared to address these factors head-on.

• Slow adoption of emerging technologies
  One notable challenge in Malta is the relatively slow adoption of emerging payment technologies. While mobile payments are gaining traction globally, only a fraction of customers in Malta engage with mobile payment options. In 2022, only about 3% of all POS transactions were mobile payments. That poses a dilemma for businesses, which need to support a wide array of payment methods.

• Regulations on data management
  The GDPR has increased the compliance demands on businesses that operate in Malta. Noncompliance can result in substantial fines, potentially up to €20 million or 4% of a company’s global annual turnover. These requirements demand investments in data governance, particularly for payment systems—where data sensitivity and the frequency of data exchange are top concerns.

• Complexity in international transactions
  Managing international transactions outside SEPA, where SEPA’s simplified payment system doesn’t apply, can be complex. Businesses that operate internationally face exchange rate fluctuations, diverse regulatory frameworks, and varying consumer preferences. They must address these issues, which can impact their operations and financial outcomes.

• Disputes on card payments
  Managing disputed card payments is a challenge in Malta, as in many other markets. To manage them effectively, businesses need to invest in sophisticated resolution systems and legal expertise, which can be resource-intensive.

Key takeaways

Malta’s geographic location and commitment to financial improvement make it a compelling destination for businesses. Here’s a recap of our top takeaways for entering Malta’s payment market.

Embrace local preferences

• Use SEPA Direct Debit
  SEPA is influential in Malta, and many businesses and customers rely on SEPA Direct Debit for recurring payments. In 2022, more than 18 million SEPA payments were sent from Malta. Using SEPA-compliant payment gateways can be an effective tactic for businesses that work with subscriptions or other recurring revenue models.

• Implement multicurrency options
  Malta is a popular tourist destination, and offering multiple currency options can enhance the payment experience. Customers appreciate the convenience of paying in their preferred currencies, especially when they visit from abroad. Ensure your payment system supports multiple currencies to cater to a diverse customer base.

• Accept cash
  Malta had the highest proportion of cash to noncash transactions of any country in the eurozone in 2021, which means it’s important for businesses to continue catering to customers who prefer to pay with cash.

Comply with regulatory standards

• Follow GDPR rules
  Malta has specific regulations regarding data privacy and consumer protection, including how personal and payment information should be handled. Compliance with local laws such as the GDPR and Malta-specific amendments is necessary for building trust with customers and avoiding potential legal issues.

• Know the role of local oversight
  The MFSA serves as the primary regulatory authority that oversees financial services in Malta. The MFSA’s regulatory framework complies with EU directives, safeguarding customer interests and maintaining the integrity of the financial sector.

• Understand the importance of PSD2
  The country’s adherence to EU regulations, including PSD2, facilitates cross-border transactions and bolsters confidence in the local payment sector.

Maintain strong security infrastructure

• Consider using payment processors
  Payments service providers in Malta comply with local regulations, and many employ advanced technology such as machine learning algorithms to detect and prevent fraud while safeguarding customer data.

• Comply with PSD2
  Under PSD2 regulations, payments service providers in Malta must use SCA. This involves requiring two-factor authentication for many transactions.

• Use advanced security technology
  Implement security measures such as two-factor authentication and high-level encryption so customers feel confident in making payments.