There was a period not too long ago when paying digitally in Malaysia still felt like a choice rather than a habit.

Even with the technology in place, daily habits had not yet shifted. For many, the question was: Why bother?

But the change is now visible in the numbers published in the 2025 Annual Report by Bank Negara Malaysia, which offers one of the clearest snapshots yet of how deeply digital payments have settled into everyday life.

What once required persuasion, especially to those not-so-tech-savvy Malaysians, now happens almost automatically.

18.4 Billion Digital Transactions and Still Growing

Data from Bank Negara Malaysia shows just how quickly digital payments have become part of daily life in Malaysia.

The country recorded 18.4 billion e-payment transactions in 2025, marking a 25% increase from 14.7 billion the year before.

Usage at the individual level tells the same story, where on average, each Malaysian carried out 538 digital payment transactions over the year, up from 432 in 2024.

That figure sits comfortably above the trajectory outlined in the Financial Sector Blueprint, with e-payments expanding at a compound annual growth rate of 17% since 2022.

BNM reported that digital payments have spread beyond cities and tech-literate users, showing up at places where convenience matters.

In value terms, retail e-payment transactions reached RM831 billion, representing growth of 19% year-on-year.

Meanwhile, cheque usage continued its gradual retreat, declining by more than 21% to 31.4 million transactions.

DuitNow QR Made It Easy for Everyone to Go Digital

Few developments illustrate this transition more clearly than DuitNow QR where its transaction volume climbed to 3 billion in 2025, doubling from 1.5 billion the previous year.

The network of registered touchpoints also continued to widen, reaching close to 3 million locations across the country, up from 2.6 million in 2024.

The expansion stands out because of both how fast it is and the types of businesses joining where a large share of these new touchpoints belongs to MSMEs who once relied almost entirely on cash.

Many of these merchants were eager to adopt digital payments but practical barriers kept some of these merchants on the sidelines.

But QR payments lowered those barriers in practical ways.

Merchants have now benefited from reduced costs for accepting payments, while funds flowed more quickly into their accounts and day-to-day accounting became far easier to manage.

For small businesses operating on tight margins, these improvements mattered just as much as attracting new customers.

Such a change has strengthened the operational rhythm for small merchants.

With cash handling simplified and payments settling more reliably, business owners can spend more of their energy on growing their business and serving their customers.

Today, DuitNow QR sits comfortably alongside cash and cards as a standard way to accept payment even so that in many parts of Malaysia, it is the first option customers reach for without giving it much thought.

Mobile First, But Cards Aren’t Out of the Game

Malaysians are moving toward digital payments in ways that make mobile devices the primary channel.

The central bank reports that mobile banking now accounts for 64% of all online banking activity, with 25 million active users, up 8.7%, although at a time where internet banking usage fell slightly to 21 million.

But that’s not a big problem as even though the change has been steadily gradual, it indicates a pivot in daily habits as people pay quickly and seamlessly through their phones.

And despite the hike in mobile first usage, cards, on the other hand, continue to hold their ground.

Debit card transactions expanded by 20.5%, growing at a faster pace than credit cards, which recorded growth of 10.9%.

Contactless usage also maintained strong momentum, rising by 20.3% to reach two billion transactions.

What I can conclude is that when speed is essential and especially when connectivity is uncertain, many consumers still reach for a card first.

Another shift is also taking place within the e-money segment where the average transaction value increased to RM43, up from RM33 in 2024.

As transaction sizes grow, digital wallets are taking on a wider range of financial activities.

Today, most of these e-wallets can handle everything from micro-insurance to basic investment products, stepping into areas that were once dominated by conventional banks.

Viewed as a whole, the payments landscape is spreading outward, with different channels finding their place depending on context, convenience, and customer preference.

Digital Payments Are Starting to Cross Borders in ASEAN

While domestic adoption continues to mature, attention is increasingly turning beyond Malaysia’s neighbours.

The country now maintains 29 live instant payment linkages across ASEAN, forming a growing network that connects national payment systems in ways that were difficult to imagine a decade ago.

These connections are starting to make cross-border payments smoother and more familiar for both consumers and businesses.

With cross-border QR payments rising 179% and person-to-person transfers up 121% year-on-year, it’s clear that usage accelerates rapidly once the underlying systems are established.

A practical illustration can be seen in the Malaysia–Cambodia corridor.

Phase 2 of the linkage was introduced in 2025, allowing Malaysians to pay Cambodian merchants using KHQR directly through their existing banking applications.

In many cases, the transaction happens without the need to handle foreign currency or navigate separate payment channels.

Small businesses benefit directly as payments become easier to handle and operations run more smoothly.

Travellers and consumers, meanwhile, encounter a payment experience that feels much like a domestic transaction, even when it takes place across borders.

Looking further ahead, initiatives such as Project Nexus are being developed to connect payment systems across multiple jurisdictions, including Malaysia, Singapore, Thailand, India, and the Philippines.

The goal is to establish a shared framework that allows cross-border payments to move with the same reliability and predictability as local transactions.

All These Payments Run on Systems You Don’t See

As digital payments stretch across borders and transaction volumes continue to climb, attention naturally gravitates toward the apps and interfaces that people interact with every day.

Yet beneath those familiar touchpoints sits a layer of infrastructure that quietly carries the weight of the entire system.

In 2025, Malaysia reinforced that foundation with the launch of RENTAS+, an upgraded core settlement platform designed to support near real-time processing for retail payments around the clock.

The shift to a 24/7 operating model has strengthened both the speed and dependability of the national payments network, allowing institutions to move funds with greater certainty regardless of the time of day.

Beyond domestic operations, another milestone took shape at the international level.

BNM pointed out that Malaysia became the first country to fully adopt the ISO 20022 messaging standard for cross-border payments, completing the transition ahead of the global deadline set by SWIFT.

That move aligned local systems with emerging global practices and positioned the country to handle more complex payment flows in the years ahead.

Transitioning From “Try It” to “Can’t Live Without It”

With the infrastructure firmly in place and usage patterns stabilising, the conversation around digital payments has begun to shift.

Encouraging adoption is no longer the primary challenge because for most Malaysians, digital payments have already become part of the rhythm of daily life, woven into routines.

Businesses, large and small, have also adjusted their operations accordingly, treating digital acceptance as a standard requirement rather than an optional upgrade.

Attention is now turning toward the next phase of development where policymakers and industry players must now ask how the system should evolve as transaction volumes continue to expand and customer expectations grow more sophisticated.

Several priorities are beginning to take shape as the payments ecosystem matures.

Cross-border connectivity is expanding across ASEAN, digital wallets are extending into new financial services, and core infrastructure continues to receive steady investment to maintain reliability at scale.

Even so, cash remains present in the background, particularly in situations where connectivity is inconsistent or where physical transactions still feel more practical.

That coexistence reflects a payments environment that is broadening in capability while maintaining flexibility for different circumstances.

Digital payments in Malaysia have passed the tipping point. Adoption is no longer tentative as there are millions of users now that rely on these systems as part of their daily routines.

Yet even with 18.4 billion transactions, this is only a midpoint.

The “why bother” question has largely been answered but now I have another one to ask.

Are we there yet?

Featured image: Edited by Fintech News Malaysia based on images by bdrabiul22 and ku-rea37 via Freepik.