Payments Snapshot in Malaysia: Coronavirus (COVID-19) Sector Impact

Payments Snapshot in Malaysia: Coronavirus (COVID-19) Sector Impact

Summary

The Coronavirus (SARS-CoV-2) outbreak, dubbed COVID-19, is first and foremost a human tragedy, affecting millions of people globally. The contagious Coronavirus, which broke out at the close of 2019, has led to a medical emergency across the world, with the World Health Organization officially declaring the novel Coronavirus a pandemic on March 11, 2020.

The Malaysian Institute of Economic Research estimates the number of job losses at 2.4 million in 2020. The Malaysian government estimates that the tourism industry lost nearly MYR3.4bn ($831.2m) between January and February 2020. This will make up a share of the projected 0.8-1.2% hit, worth up to MYR17.3bn ($4.2bn), on the country’s economy due to the pandemic.

As part of the stimulus package, the government has lowered employee contribution to the provident fund (Malaysia’s private sector pension fund) from 11% to 7% until December 2020 to drive consumption. The new rates will come into effect from April 2020’s wage.

This report focuses on the impact of the Coronavirus outbreak on both the economyand the cards and payments industry in Malaysia. Based on our proprietary datasets, the snapshotprovides a detailed comparison between pre-COVID-19 forecasts andrevised forecasts of total payment card, debit card, and credit and charge card transactions by value and volume. It also offers information on measures taken by the government to combat Coronavirus.

Scope

- Coronavirus has affected the Malaysian travel and tourism industry adversely. As part of the stimulus, the government is offering several benefits such as an exemption of 6% service tax for hotels between March and August 2020 as well as personal income tax relief of up to MYR1,000 ($244) on expenditure related to domestic tourism.
- The overall decline in consumer spending will partially be offset by a rise in online spending as wary consumers stay at home and use online channels to purchase goods (concentrating on groceries, medical supplies, and other essentials). Consumers in locked-down areas and high-risk areas shift from in-store to online spending to avoid exposure to disease vectors.
- Businesses are also preferring electronic payments over cash to combat COVID-19. For instance, DeliverEat has temporarily stopped accepting cash on delivery as a payment option.

Reasons to Buy

- Make strategic decisions using top-level revised forecast data on the Malaysian payment industry.
- Understand the key market trends, challenges, and opportunities in the Malaysian cards and payments industry.
- Receive a comprehensive insight into payments market in Malaysia.