Mobile Payments in Malaysia

Mobile payments are gaining popularity in Malaysia with the release of Apple Pay and Google Pay since the end of 2019 through some major banks in the country. These should not be confused with mobile payment wallets such as Touch 'n Go, Grab Wallet, etc. Mobile payments allow cardholders to link their credit or debit cards with mobile payment services on their devices, enabling them to make payments without needing to take out their physical wallets or cards, either in person or online.

Mobile payments are still in the early adoption stage, with most early adopters being foreign banks that released mobile payment services in other countries more than 10 years ago. Recently, local major banks have adopted and provided conveniences to credit and debit card holders by integrating Apple Pay, Google Pay, and Samsung Pay with their issued cards. Despite many offers encouraging users to switch to mobile payments, adoption will still take some time before becoming familiar to credit card users.

In this article, we will explore the landscape of mobile payments in Malaysia and explain how it works in retail payments. Then, we will show which credit cards are best for linking with your devices and how you can make the best use of them in your retail spending.

Apple Pay

Apple Pay is a mobile payment service by Apple, targeting users of almost all their devices, such as iPhone, Apple Watch, Mac, iPad, and Vision Pro. Currently, only five banks support Apple Pay in Malaysia: Maybank, Ambank, RHB Bank, Standard Chartered Bank, and HSBC Bank. Maybank debit cardholders can also link their debit cards to their Apple devices.

There is no need to worry about whether a physical merchant supports Apple Pay, as Apple Pay (like Google Pay and Samsung Pay) uses Near Field Communication (NFC) to link between your devices and the payment gateway. Payment gateways such as GHL, iPay88, and Fiuu are all Apple Pay ready. For online use, e-commerce platforms such as Shopee (though not Lazada and Zalora yet), Sephora, and Adidas support Apple Pay. To use Apple Pay, you just need to tap your device to the payment gateway, similar to how you pay using your credit cards. Apple Pay requires FaceID for authentication, adding an extra layer of security.

Using Apple Pay eliminates the risk of losing your cards, as it works by tokenization. This means the card number is not stored, but a virtual card number in the form of tokens is stored. Only the payment networks (Visa, Amex, or Mastercard) can process the tokens. Besides privacy and security, Apple Pay generally offers a faster checkout compared to using physical cards. One of the most convenient uses is on the Apple Watch, where you just need to tap your wrist to the payment merchant to complete the transaction.

Google Pay

Google Pay is a mobile payment service by Google, primarily used on Android devices to compete with Apple. You can use Google Pay on Android phones, watches, and laptops if they support NFC. Currently, Malaysian banks favor Google Pay over Apple Pay, as most mass-market users have Android phones. Banks such as Ambank, Muamalat Bank, CIMB Bank, Hong Leong Bank, HSBC Bank, Maybank, Public Bank, RHB Bank, and Standard Chartered Bank accept Google Pay. Only Maybank, Public Bank, and Hong Leong Bank allow linking Google Pay to debit cards, while all mentioned banks support credit cards.

Similar to Apple Pay, Google Pay uses NFC to communicate between payment gateways and devices. While some older Android phones may not have NFC, more than 95% of phones on the market now support NFC. Besides Android, Google's WearOS and FitbitOS also support Google Pay in Malaysia.

Both Apple Pay and Google Pay allow you to link each card once, and then multiple devices automatically sync with the credit or debit card information. This convenience extends to online transactions, where you don’t need to remember all the pins and card information; a click and face authentication automatically complete the purchase.

Samsung Pay

Another major mobile payment service is Samsung Pay, provided by Samsung for use in most of their handheld devices. Currently, Maybank, CIMB, HSBC, Standard Chartered, Hong Leong Bank, Public Bank, and RHB Bank support Samsung Pay for their credit cards. While cardholders can use Samsung Pay at most physical merchants, Samsung Pay is lagging behind in online merchants, currently only supporting Samsung's own ecosystem online.

Other Mobile Payments

There are other mobile payment services such as Garmin Pay and Huawei Pay, which are more limited to their own brands and have a much smaller ecosystem in Malaysia. For example, Huawei Pay requires a Huawei phone with Huawei Wallet before cards can be linked. After many years of adoption, only ICBC bank credit card supports Huawei Pay.

Summary

In this article, we presented the types of mobile payments and the places that support them. In Malaysia, mobile payments are still limited to physical retail spending and not so much online. One reason for the limited online support is the convenience of other methods such as click-to-pay or card binding activities by e-commerce operators, making mobile payments seem redundant. However, we should see more use of mobile payments, especially for public transport such as metros and buses, which are currently under development.

Mobile payments might need to compete with QR payments, as QR payments are easier to use and more merchant-friendly compared to mobile payments. This impacts the popularity of mobile payments in Malaysia. Nevertheless, mobile payments offer higher security features, which is a plus point as awareness of safe payments increases, adding value to businesses.