UOB survey finds Malaysians prefer contactless payments during the COVID-19 pandemic
Consumers are willing to go fully cashless if they see improved security and convenience in digital payment methods
Kuala Lumpur, Malaysia, 30 December 2020 – COVID-19 has compelled at least six in ten Malaysians (69 per cent) to depend more heavily on the various forms of contactless payment, according to the UOB ASEAN Consumer Sentiment Study1.
Payments made through mobile banking are consumers’ most popular choice with 69 per cent of Malaysian respondents saying they used them more frequently during the pandemic. Other contactless payment and transaction services that have become preferred payment options in Malaysia include Quick Response (QR) code payments (65 per cent), internet banking (65 per cent) and mobile wallet debit or credit cards (60 per cent).
Among the different age groups2, Generation Y (75 per cent) relied mostly on mobile banking, while Baby Boomers (76 per cent) preferred internet banking and Generation X (64 per cent) used QR code payments more often.
Although Malaysians are keen to continue using contactless payments, two-thirds of the respondents are still likely to have used cash at least once a week. The study showed that about nine in 10 consumers are willing to go entirely cashless if more initiatives are put in place to support digital payments. Among the improvements that Malaysians expect are a wider variety of cashless payment options (94 per cent), better security (94 per cent) and greater ease of use (93 per cent).
Mr Ronnie Lim, Managing Director and Country Head of Personal Financial Services, UOB Malaysia, said the findings reflect consumers’ preference for payment solutions that are convenient and are able to meet their everyday needs, especially during the pandemic when physical contact has to be minimised.
“The pandemic has accelerated the adoption of contactless payments in Malaysia. In the first 11 months of this year, the total number of digital fund transfers through our all-in-one mobile banking app, UOB Mighty grew more than 76 per cent3 compared with the previous year. From what we have seen, customers prefer to use our mobile banking service to make fund transfers and to pay their bills. According to UOB Malaysia’s data, DuitNow was the most used digital payment function on the app, accounting for 74 per cent4 of all digital transactions carried out in the first eleven months of the year.
“We understand that customers want speed, security and convenience when carrying out digital payments on a mobile banking app. Based on our insights, we enhanced UOB Mighty to incorporate a QR code payment function, enabling customers to scan a QR code to transfer funds or to make payments safely. We also redesigned the app’s user interface to make it easier for customers to access both the DuitNow payment function and the UOB Mighty Secure digital security token on the home screen once they log into the app. These app enhancements reaffirm our commitment to harnessing technology to make banking simpler, safer and smarter for our customers,” Mr Lim said.
Spending priorities for consumers shift during COVID-19
The UOB ASEAN Consumer Sentiment Study also found that 55 per cent of Malaysian respondents are spending more during the pandemic, while 27 per cent say the exact opposite is happening.
When asked about the items that they had been spending more on since COVID-19 restrictions came into effect, 67 per cent of consumers said groceries and 63 per cent said food deliveries. Half of them reported increased spending for internet services, online learning and health supplements. The survey also shows that the top categories in Malaysia for reduced expenditure are travel (68 per cent), jewellery (57 per cent), clothes (49 per cent) and homeware and furniture (45 per cent).
Mr Lim said, “During these trying times, we understand that consumers are mindful of their spending. To help our customers manage their finances better, we recently launched Mighty Insights5, the country’s first artificial intelligence (AI)-based digital banking service that helps customers to track and to manage their savings and expenses effortlessly.
“Using UOB’s proprietary AI-driven predictive analytics engine, machine learning and pattern recognition algorithms, Mighty Insights provides customers with personalised insights based on their banking and spending patterns, offering them the most suitable financial solutions to help them save and spend wisely. With the assistance of these meaningful insights, our customers can learn to anticipate and to manage their cash flow while increasing savings and reducing debt. This will help them to gain greater control of their finances.”
1 The survey was conducted by UOB in July 2020 among more than 3,500 individuals aged between 18 and 65 years old across five ASEAN markets, namely Indonesia, Malaysia, Singapore, Thailand and Vietnam. In terms of using cashless payments frequently during the pandemic, Malaysian consumers were only behind those in Singapore (70 per cent), but ahead of Vietnam (64 per cent), Indonesia (63 per cent) and Thailand (51 per cent).
2 The UOB ASEAN Consumer Sentiment Study defines the age group for each generation as the following: Generation Z (aged 18 to 23), Generation Y (aged 24 to 39), Generation X (aged 40 to 55) and the Baby Boomer Generation (aged 56 and above).
3 Source: UOB Malaysia data on mobile payment financial transactions by volume from 1 Jan 2020 to 30 November 2020 and 1 Jan 2019 to 30 November 2019.
4 Source: UOB Malaysia data on mobile payment transactions by digital payment type from 1 Jan 2020 to 30 November 2020.
5 Please see UOB Malaysia news release: “UOB Malaysia launches Mighty Insights, Malaysia's first AI-powered digital service on its all-in-one mobile banking app”, 21 October 2020.
6 The UOB Mighty app supports Android 8.0 or higher and iOS 10.0 or higher.