Malaysia’s E-Wallet and Digital Banking Usage in 2024: Going Cashless Reigning Supreme
Since 2021, we at Oppotus have kept a close eye on the growth of e-wallets in Malaysia and how events both global and local affect the e-wallet scene. This year, we decided to take a look at not just how well Malaysia’s e-wallets are doing, but also at an up-and-coming fintech service: Digital Banking.
As more vendors and consumers alike embrace the concept of going cashless, it looks like the era of physical paper and coin currency is slowing down. With the introduction of e-wallets and digital banking, Malaysia’s financial landscape has evolved and is going towards a more tech-driven direction. Without further ado, let’s dive into how well e-wallets and digital banking did last year.
Looking Back at Malaysia’s E-Wallet Market Landscape
Last year, the number of Malaysians using e-wallets increased to a whopping 88% on average compared to 63% in 2023. Unlike the previous years that have seen a rise and fall in the usage of e-wallets, 2024 has seen steady growth throughout the year and even recorded 94% use in Q4’24 alone, the highest usage we have seen so far.
E-wallets are not confined to being used only for online shopping. As the Malaysian government has been encouraging cashless transactions, we can see a decrease in cash usage compared to the year before. While going cashless does not mean using just e-wallets, the data shows that it is the primary mode of cashless payment methods that consumers turn to, rising to 23% of usage compared to 10% in 2023.
This then begs the question: are e-wallets a safer option for cashless transactions compared to credit and debit cards? Over the years, there have been reports from consumers about their e-wallets being hacked when connected to TikTok Shop. This is why e-wallets, like TNG eWallet and ShopeePay, announced the requirement for users to do an eKYC verification for their accounts starting December 2024. This move is said to help enhance the security features of the respective e-wallets.
While cash is still the most used payment method, we can see that only 36% of physical transactions made last year use cash compared to 45% the year before. This rise in e-wallet usage and decline in paper and coin currency could suggest that e-wallets are being used as a way to replace cash in physical transactions.
On average, we have found that Malaysians spent more with their e-wallets last year as compared to the year before. The average monthly expenditure using e-wallets has risen to RM388 per month last year, with more Malaysians spending between RM300 – RM1,000 through their e-wallets.
The data shows that only a small percentage of Malaysians spend an average of over RM1,000 monthly with their e-wallet. This suggests that while e-wallets are convenient and offer large transactions and wallet-holding limits, Malaysians still prefer to use other payment methods for large expenditures. After all, 0% instalment plans introduced by credit cards are still the most viable method to weigh out a lump sum payment.
The data collected shows that the F&B sector continues to be where Malaysians use their e-wallets. This is no surprise as Malaysians, we are known for our love for food. In fact, research has found that Malaysians spend an average of RM800 to RM1200 per month eating out. Last year, the F&B sector saw a rise of 10% from the previous year, while the food delivery sector is on a downtrend. This could primarily be due to the higher cost of delivery.
Despite the love for eating out, the Groceries sector is still the 2nd sector where Malaysians use their e-wallets. This could be due to the convenience of checking out, special promotions, and other perks offered by certain e-wallets in partnership with selected merchants.
E-Wallets: Are Consumers Spoilt for Choice?
In Malaysia, we have more than 50 e-wallets for consumers to choose from. Each e-wallet comes with its own perks or rewards system. While 50 e-wallets are definitely too much for one person to use, we can see that, on average, each Malaysian used at least 2 last year.
This ties in with the trend we saw the year before, where Malaysians use between 1 – 3 e-wallets on average. When comparing the data between 2024 and the years before, we can see that our 2023 observation of how Malaysians are now streamlining their preferred e-wallets is relevant.
Of the 50-plus e-wallets in Malaysia, TNG eWallet has continued to reign supreme since 2020, while MAE has solidified its position as the 2nd most prominent player in the scene. Following behind the top 2 players are GrabPay, Boost, ShopeePay and BigPay.
It is no surprise that TNG eWallet is still the most prominent player in the market. After all, the e-wallet is used in many places, from convenience stores to online retail, and can even be linked to a TNG card that is widely used for highway tolls, public transportation and even parking.
In all the Top 5 sectors, we can see that while TNG eWallet remains the top most used e-wallet, there seems to be a sharp decline in Q4’24 compared to Q4’23. MAE also saw a downward trend in Q4’24, but not as steep a drop as TNG eWallet. Both e-wallets remain the top 2 most used in all sectors.
In the F&B sector, we see that ShopeePay started with the lowest market share among the other e-wallets in Q1’24. But in Q4’24, the e-wallet gained back some market share, rising from 1% in Q3’24 to 7%. This could be due to the higher transaction and wallet-holding limits introduced in December 2024 to users who completed the enhanced eKYC process. This likely affected the rise of its market share in other sectors for Q4’24.
While other e-wallets see a rise and fall in market share in the Groceries sector throughout the year, GrabPay has maintained a steady trend. This could be due to the GrabRewards Points users (depending on their Grab membership tier) receive when shopping at Jaya Grocer, a leading mass-premium supermarket chain in Malaysia, of which Grab is now a majority stakeholder.
In the Convenience Stores sector, we see that GrabPay is holding steady, with slight variation between the different quarters. Boost and BigPay have seen a market share drop when comparing Q1’24 and Q4’24. While ShopeePay did see a drop in usage during Q2’24 and Q3’24, it did see an increase in Q4’24 that could be tied back to their eKYC policy.
In the E-Commerce sector, it is surprising that ShopeePay does not own more market shares as the e-wallet is tied to an e-commerce platform. From the data, we can see that 0% of Malaysians used ShopeePay in Q1’24. In Q4’24, their market share rose to 9%, which could be due to the higher transaction and wallet-holding limits and the large volume of end-year sales events and promotions like 11.11 and year-end clearance sales happening on its e-commerce platform.
Regarding the Bill Payments sector, we can see that TNG eWallet, MAE and GrabPay all experienced a decline from Q3’24 to Q4’24. The remaining top 3 e-wallets saw a substantial increase in their market shares during this period, especially ShopeePay and BigPay. While the rise in market share for ShopeePay could be linked to the eKYC policy, BigPay’s rise could be related to its big year-end campaign that offered users the chance to win flights and AirAsia points when paying their bills via the BigPay app.
Digital Bank: What is It? Is it Different from E-Wallets?
Undoubtedly, digital banking and e-wallets function in the same financial industry; However, it’s important to note that their concepts are quite distinct. A digital bank is a financial institution that offers traditional banking services, such as fund transfers, bill payments, and personal loans. It is a bank without the hassle of long physical queues and limited operating hours. It is convenient and easily accessible at all hours of the day via the Internet. Are traditional banks’ banking apps considered digital banks? No, they are not. Banking via these apps is defined as online banking or Internet banking.
On the other hand, e-wallets are mobile apps that make it easier for users to make payments by storing cash and users’ debit and credit card information digitally. They also allow users to receive rewards through points collection, special promotions, and even cashback like a store’s membership card. In essence, e-wallets are the virtual/digital of our physical wallets.
While e-wallets started back in the early 2010s, digital banking started in Malaysia in 2022 with only 3 digital banks available compared to the 50-plus e-wallets in operation. In April 2022, BNM issued digital banking licences to 5 out of 29 applicants. Of the 5, only 3 have launched their platforms: Aeon Bank, GXBank and Boost Bank at the time of writing. YTL Digital Bank Berhad is poised to launch its platform, Ryt Bank, sometime this year. When the platform goes live, Ryt Bank will be Malaysia’s first AI-powered digital bank. On the other hand, KAF Digital Bank (a Shariah-compliant digital banking service) is the only other remaining digital bank that has yet to launch its platform.
Is Digital Bank Here to Stay?
Last year was when the fintech landscape in Malaysia saw extraordinary growth due to the launch of the first digital banks in the country. Awareness and familiarity with digital banks have been consistently on an uptrend since Q4’23, with 93% of consumers saying they were aware of digital banks in Q4’24. While not many seem to be familiar with digital banks, we can hope to see a steady increase as 2025 progresses.
Unlike e-wallets, which only became popular in the late 2010s, it seems that digital banks have a higher penetration rate in the market. We may see an uptake in more Malaysians becoming familiar in the years to come.
Of the 93% of Malaysians who say they are aware of digital banks, only 50% are users. From there, we looked closer to see which digital bank currently holds the most market share. Of the 3 that have launched their platforms, the most used digital bank is GXBank. This is unsurprising as it generated much hype during its launch at the end of Q4’23. In fact, within the first 11 days that GXBank launched its GX card, the digital bank announced that it achieved 100,000 debit card users. In 2nd and 3rd place are Aeon Bank and Boost Bank. However, market share may shift once the other 2 digital banks join the market.
As for the 50% who are currently non-users of any digital bank, about 70% of them have indicated the intention to apply for a digital bank in the future. Some concerns or further education could be needed among non-users before they can embrace digital banking.
Upon taking a closer look at the profiles of current users of digital banks, we can see that most of them live in the KL/PJ areas and belong to the more affluent segments (Upper M40 – T20). This is likely due to the tendency for people in these areas, or those with higher income levels, to stay on trend with the latest technology.
E-Wallets and Digital Bank: The Future of Malaysia’s Finance Industry
The Malaysian government announced a framework to encourage cashless transactions in last year’s budget. This involved allocating RM1 Billion to eMADANI and the National Cashless Boleh 4.0 campaign that recorded over 138 million cashless transactions. The government’s support for new technological innovations has encouraged the rapid growth of the country’s fintech sector, which might spell a new era for Malaysia’s finance industry.
As almost 100% of Malaysian households have access to mobile phones, the pivot to a more digital economy was bound to happen sooner or later. And it may be the answer to one of Malaysia’s pressing issues: financial inclusion. In 2023, BNM announced its four-year strategic roadmap to advance financial inclusion in Malaysia. One of the challenges it identified was the difficulties remote communities face in accessing traditional banks due to the lack of traditional banking infrastructure. As almost all Malaysians have access to mobile phones and the internet, digital banking could be the key to reaching out to people living in underserved populations.
While cyber security is a concern, the government and its agencies are working on further enhancing the infrastructure by adopting new safety measures as well as working with international partners and emerging technologies. As Malaysia continues to grow its digital economy, we look forward to seeing more technological innovations that will further advance the country and its finance sector in the future.
Looking for a deeper dive into the e-wallet and digital banking scene in Malaysia? Feel free to contact us at: theteam@oppotus.com.
