Recall the old adage "cash is king"?
Undoubtedly, having cash on hand provides us with the financial freedom to acquire whatever we desire or require at a moment's notice. However, the irony of this age-old saying is that physical cash seems to have become increasingly rare in our daily transactions.
With technology advancing rapidly each year, it's undeniable how much easier it has made our daily lives. Nowadays, instead of lugging around a bulky wallet or loads of cash, everything we need is right at our fingertips, all thanks to our mobile phones.
Our smartphones have become incredibly versatile, serving as our go-to tool for nearly everything (except, of course, filing taxes). The convenience has skyrocketed with the availability of apps that allow us to make payments through digital or mobile wallets. Among the favourites for Malaysians are the MAE app, CIMB, Touch 'n Go e-wallet, Grab Pay, Boost, and, for some, WeChat Pay.
For those who believe Malaysia is lagging behind in the cashless society trend, think again. According to Adyen, Malaysia is actually leading the global pack in mobile wallet usage.
63% Of Users Actually Prefer Mobile Wallets For Shopping
According to Adyen's 2024 report, a significant majority of Malaysians (63%) have expressed a preference for using mobile wallets while shopping, marking the highest rate globally.
Their survey, conducted from January 15th to February 1st, drew data from a retail report encompassing 38,000 shoppers and 13,000 merchants across 26 markets. In Malaysia, the survey included 1,000 consumers and 500 businesses.
The report highlights a noticeable shift, with approximately 41% of consumers in Malaysia opting to forgo physical wallets. Shoppers also favour quick and convenient methods like QR codes or touch-and-pay for transactions.
Shoppers Frequently Use Social Media To Shop
Interestingly, the survey results revealed that 73% of respondents have made online purchases through social media platforms, with TikTok Shop emerging as the top choice. Moreover, enabling social commerce has led to revenue growth for 73% of merchants, which is 44% higher than the global average.
Adyen's report also notes that Malaysians typically shop from these platforms approximately six times a month, extending across popular platforms like Shopee and Lazada.
Adyen also highlighted that millennials represent the largest demographic of social media shoppers compared to other age brackets, with an impressive 80% having made purchases in the past year.
Conversely, Gen Z users demonstrated the most significant growth, with 17% of them being first-time shoppers in the previous year. The survey also suggested that businesses are adjusting their strategies to align with the evolving preferences of customers which also contributes to the 73% of revenue growth thanks to engaging in social commerce.
And thanks to trust being built between the buyer and seller, at least 45% of users are likely to stick with merchants who let them purchase directly through social media platforms.
In the meantime, Soon Yean Lee, the Country Manager for Adyen Malaysia, observed that these findings indicate a significant move among Malaysians towards digital payments and social commerce, placing Malaysian consumers at the forefront of the worldwide mobile wallet trend.
“To maintain customer loyalty and stay competitive, businesses must be agile in meeting these changing usage preferences,” he emphasised.
Malaysia One Of The Selected Targets For Cyberattacks & Data Breaches
An astounding 95% of retailers reported instances of cyberattacks or data breaches in 2023, positioning Malaysia as the second most targeted country globally after Canada, as per Adyen's findings.
Sixty-five percent of these businesses acknowledged that fraudulent transactions and chargebacks had significantly impacted their operations and profitability, surpassing the global average of 51%. To counteract fraud and minimize chargebacks, Adyen indicated that 69% of Malaysian businesses are contemplating partnering with their payment providers to introduce charge-back liability guarantees.
Explaining the concept of chargebacks, Lee mentioned, "A fraudster may purchase a product from the website and receive the goods, but then calls the bank to dispute the charge, claiming non-receipt."
To tackle fraud, Lee recommended that merchants implement built-in risk management driven by machine learning to detect and prevent fraudulent activities while ensuring a seamless experience for genuine customers.
While emphasizing the importance of implementing authentication requirements for online purchases to mitigate fraudulent charge-backs, Lee also underscored the need to minimize friction for loyal customers.
In conclusion, the surge in e-wallet usage can largely be attributed to the enticing offers they provide, with each platform tailored to meet specific user preferences. From cash-back incentives to discounted movie tickets and point-based reward systems, e-wallets offer a myriad of benefits to users.
However, is the rise of e-wallets truly signalling the demise of cash? Not quite. Certain aspects of daily life, such as paying for parking at select malls or purchasing goods at smaller markets, still necessitate the use of cash. So while e-wallets may be revolutionizing the way we handle transactions, cash still retains its relevance in certain situations.
What are your thoughts on this? Let us know in the comments.
*Sources: Visual and Reference Credits to Social Media & various cross-references for context.
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