With an ecommerce market that is projected to yield about $8.8 billion in 2025, Malaysia has plenty of opportunities for foreign businesses. For those that want to expand into Malaysia, there are important local nuances to understand regarding payment preferences, international transactions, and payment security regulations.

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

• Adopting mobile payments
  
• Improving customer support
  
• Mitigating payment fraud
  

The state of the market

To grow the ecommerce market, the Malaysian government has used initiatives to support cashless payments. Traditional payment methods such as cash and credit cards coexist with more modern options such as digital wallets. And big players in the mobile payment space have been appearing throughout the region.

As a member of the Association of Southeast Asian Nations, Malaysia shares the organization’s vision of financial integration. This could pave the way for smoother cross-border payments within the region. Bank Negara Malaysia (BNM), Malaysia’s central bank, governs the country’s financial policies and oversees monetary stability. The Securities Commission Malaysia supervises and enforces financial regulations within the capital market.

Payment methods

Malaysians have embraced a wide range of payment styles. Here are some of the most popular options.

Current usage

Malaysia has shifted away from a cash-based economy in recent years. The share of adults in Malaysia who made or received digital payments increased from about 62% in 2014 to nearly 80% in 2021. The share of cash withdrawals in the country’s payment card transaction value decreased from about 63% in 2021 to about 50% in 2025. A majority of card transactions are now contactless.

QR codes have helped facilitate small digital transactions. Digital wallets including GrabPay, Touch ’n Go eWallet, and Boost have penetrated the market, facilitating a wide range of transactions from retail purchases to bill payments. Digital payment adoption has increased among adult Malaysians in urban areas from 25% in 2019 to 88% in 2024.

Popular B2C payment methods in Malaysia

• Credit cards
  
• Digital wallets (e.g., GrabPay)
  
• QR codes
  
• Bank transfers
  

Popular B2B payment methods in Malaysia

• Credit cards
  
• Bank transfers
  
• Digital wallets
  

Emerging trends

Buy now, pay later (BNPL) solutions are gaining traction in Malaysia, and the market is projected to grow more than 15% from 2024–2025 to reach about $2.5 billion. Customers have shown a growing interest in paying in installments, using providers like Atome, Grab PayLater, and ShopBack PayLater.

Ease and friction of entry

Expanding your business into Malaysia requires special considerations regarding taxes, payment disputes, international payments, and payment security. Here’s an overview.

Taxes

The standard rate for sales tax is 10%, with some goods taxed at a reduced rate of 5%. While customers feel the immediate impact of this tax on the purchase price, businesses must collect and remit it to the government and can face penalties for mismanagement or evasion.

Chargebacks and disputes

In Malaysia, chargebacks and disputes are primarily governed by the Payment Card Reform Framework introduced by BNM. The goal of this framework is to boost card usage, maintain fair practices, and give customers a channel to contest unauthorized or problematic transactions.

When a cardholder in Malaysia identifies an unauthorized transaction, they can initiate a chargeback request through their issuing bank. Businesses can either accept the chargeback or provide evidence that the transaction was legitimate. In cases where the business can substantiate its claim, the burden of proof shifts to the cardholder.

International payments

Accepting payments from international tourists or businesses in Malaysia presents additional hurdles. Here are a few factors to remember.

• Currency conversion
  Conversion rates are determined in real time, with fees typically ranging from 1%–3%. Some businesses absorb this cost, while others pass it on to customers. Third-party platforms that facilitate currency conversion like Stripe can simplify this process for businesses.

• Multicurrency features
  Businesses that cater to international clients or operate online often incorporate multicurrency features into their payment gateways. These systems automatically detect a customer’s location and present prices in the local currency.

• Payment methods from other markets
  Accommodating popular payment methods from other countries (e.g., China’s WeChat Pay, Singapore’s PayNow) can improve sales with international tourists by making the checkout process more approachable.

Security and privacy

Malaysia continues to update and refine its regulatory frameworks to meet the needs of digital transformation. Here are the payment security regulations businesses should be aware of before they accept payments in Malaysia.

• Data protection laws
  Malaysia’s Personal Data Protection Act 2010 is the primary legislation that governs the processing of personal data in commercial transactions. This act mandates that businesses obtain explicit consent from individuals before they collect, process, or transfer their personal data.

• Electronic transaction guidelines
  The Electronic Commerce Act 2006 and the Digital Signature Act 1997 were established to make electronic contracts as legally binding as traditional paper-based contracts. The Digital Signature Act 1997 provides a framework for the use of secure digital signatures, adding a layer of verification to electronic transactions.

• Payment card reforms
  The Payment Card Reform Framework focuses on improving the country’s payments infrastructure, promoting fair practices, and driving electronic payment adoption. Some of the issues covered in the framework include operational efficiency, security standards, and transparency in credit and debit card operations.

• Mobile payment regulations
  BNM introduced guidelines to ensure that mobile payments and digital wallets are safe and easy to use. These guidelines cover aspects ranging from interoperability to security measures, guaranteeing that users’ funds and data are protected.

• Anti-Money Laundering (AML) laws
  The nation’s AML and anti-terrorism financing legislation mandates that financial institutions establish customer identification procedures, retain transaction records, and report suspicious transactions to the authorities. The act aligns with international standards set by bodies such as the Financial Action Task Force.

Key success factors

Every growing economy has its challenges. While Malaysia’s payments infrastructure is constantly developing to match international standards, businesses must be aware of obstacles. Here’s how businesses can address these challenges.

• Cash considerations
  Urban regions such as Kuala Lumpur and Penang are embracing digital payments, but rural areas aren’t as quick to. According to the World Bank, 89% of Malaysian adults have bank accounts, but only 36% made a digital payment for an online purchase in 2024. This disparity means businesses with in-person operations must cater to customers who prefer to pay in cash.

• Diverse payment options
  While credit cards are widely used, digital wallets like GrabPay, Touch ’n Go eWallet, and Boost are also very common. Businesses should offer a wide range of payment methods in-store and online to cater to different consumer preferences.

• Enhanced ecommerce payment experiences
  Businesses should take into account Malaysia’s high internet penetration rate of 98% and design mobile and web payment pages with local languages and preferences in mind. This will simplify the checkout experience for Malaysian customers.

• Solid security measures
  A survey found that online fraud increased from nearly 18% in 2016 to about 24% in 2020, and the number of reported financial fraud cases grew an average of 20% annually from 2019–2021. These security concerns could slow the adoption of new payment technologies and require businesses to make additional investments in advanced security protocols.

Key takeaways

Malaysia’s payment space reflects its diverse population and quick adoption of mobile payments. Businesses that match their strategies to local preferences and payment regulations are poised to deliver a superior customer payment experience. Here’s a recap, as well as tips for accepting payments in Malaysia.

Adopt mobile payments

• Accommodate local digital wallets
  While international options are important, many Malaysians still rely heavily on regional mobile payment methods. Integrate digital wallets like GrabPay, Touch ’n Go eWallet, and Boost into your payment process.

• Embrace QR code payments
  QR code payments are widespread in Malaysia and initiatives from the central bank have supported their growth. Offer standardized options for QR code payments to make the payment process quicker and more user friendly.

• Enhance mobile interfaces
  Businesses should upgrade their mobile interfaces to take advantage of the growth in mobile payments. This simplifies the payment process and builds confidence in customers who are new to digital payments.

Improve customer support

• Offer immediate support and feedback channels
  Providing easy access to customer support can mitigate payment issues and create a more satisfying experience for customers. Ensure your customer support is responsive to feedback.

• Provide language options
  Translating your payment interfaces into Malay, Mandarin, and Tamil can help you create a more intuitive payment experience for Malaysia’s multicultural population.

• Consider cultural and festive promotions
  Malaysia’s diverse cultural events, marked by festivities such as Hari Raya and Deepavali, present opportunities for businesses to make connections with local customers. Plan seasonal promotions or payment incentives during these peak periods.

Mitigate payment fraud

• Shield online payments
  Security remains a key concern for businesses in Malaysia. Employ fraud detection and prevention tools such as 3D Secure to add another layer of protection to online transactions.

• Strengthen customer authentication
  Advanced authentication measures can increase confidence in your payment process and minimize fraudulent transactions. Use biometric verification and two-factor authentication to confirm customers’ identities.

• Stay up-to-date on regulatory requirements
  The Payment Card Reform Framework provides guidance on payment systems in Malaysia. Comply with these guidelines while watching for any new directives from BNM.