Malaysia's real-time payments surges: ACI Worldwide

• Recorded 1.1 billion real-time payments transactions in 2021
• Fifth fastest-growing real-time market, globally

Malaysia continues to accelerate its real-time payments adoption and introduce a stream of modern services, making it one of the most sophisticated real-time markets in the world, according to ACI Worldwide.

In a statement, the US-based payment solution provider said Malaysia’s real-time payments journey has been fast, distinctive, and sophisticated, encompassing speedy adoption built on low-value transactions, rapid evolution towards more sophisticated and value-added services, and a government determined to assist in driving adoption.

The data came out of the the third edition of Prime-Time for Real Time 2022, published by ACI Worldwide, in partnership with GlobalData, a leading data and analytics company and the Centre for Economics and Business Research (Cebr).

ACI Worldwide said much of the country’s success comes from a concerted effort by the government, central bank, national switch, and industry to modernise the country’s real-time payments infrastructure and harmonise the nation’s payments structure.

The company said the report tracks real-time payments volumes and growth across 53 countries  and includes an economic impact study for the first time.

It also provides a comprehensive view of the economic benefits of real-time payments for consumers, businesses, and the broader economy across 30 countries. 

This report,  ACI Worldwide said, covers all G20 nations, excluding Russia.

According to the research, governments that advance the real-time modernisation of their national payments infrastructure create a win-win situation for all stakeholders in the payments ecosystem. 

It said consumers and businesses benefit from fast, frictionless and hyper-connected payments services, financial institutions future-proof their business in a highly competitive environment.

It does this by speeding up cloud-first and data-centric modernisation, and national governments boost economic growth, reduce the size of their shadow economy and create a fairer financial system for all, it said.

Highlights of the study include:  

• Malaysia recording 1.1 billion real-time payments transactions in 2021, facilitating an estimated US$434 million (RM1.9 billion) cost savings for businesses and consumers, and unlocking US$364 million (RM1.6 billion) of additional economic output, equivalent to 1.11% of GDP;
• The country is is the fifth fastest-growing real-time market, globally, with a compound annual growth rate (CAGR) of 26.9%. This means that Malaysia is exceptional in the speed with which it has implemented nationwide real-time payments, and its rapid adoption by banks and non-bank participants; and
• Cebr forecasts real-time transactions to grow at US$3.6 billion (RM15.8 billion) in 2026, a CAGR of 26.9%, with net savings for consumers and businesses expected to reach US$637 million (RM2.8 billion) in 2026, generating additional economic output of US$954 million (RM4.1 billion), or 0.2% of GDP.

The report states that Malaysia’s real-time journey began in December 2018, with the arrival of a new real-time payments system, DuitNow, introduced by national payments network and central infrastructure provider, PayNet.

This new, modernised system, built on the latest interoperable, global, and open payments messaging standard, ISO 20022 expanded basic real-time low value account transfers to include transfers via mobile phones and ID numbers, the report noted.

It also supported online payments, in-store QR code-based payments, future-dated and recurring payments, and real-time cross-border payments with ASEAN, it said.

Recent innovations have included consent management platforms for real-time debits, ‘DuitNow Request’ and future services include Know Your Customer (KYC) digital ID compatibility, it added.

Additionally, the report forecasts, increasing consumer awareness, a growing preference for mobile payments, and the abundance of DuitNow services and features, will result in real-time payments volume growth of CAGR of 26.9% from 2021-2026.

Chee Cheng Ong (above), vice president and head of Asean at ACI Worldwide, said Malaysia is the perfect example for other Asean countries on how to establish, align, and drive adoption of a modern real-time payments network. 

“By opting to form its real-time network on ISO 20022, it is rapidly becoming one of the most harmonised and sophisticated real-time payment environments in the world and a perfect launchpad to accelerate adoption as well as provide a host of new and value-added services,” he said.

Leslie Choo (bottom), managing director of Asia-Pacific at ACI Worldwide, said Asia-Pacific remains at the forefront of real-time payments innovation as its real-time base pivots towards larger volume transactions and more sophisticated services for our businesses and consumers.  

"The next stage of evolution for the region is to develop linkages to provide a truly pan-regional real-time infrastructure, unlocking much greater economic benefit and opening up the formal financial sector to the region's vast unbanked and underbanked population,” he said.