Malaysia Acquiring: Greater business benefits and a strategic base in the heart of Asia

How can global and regional businesses benefit from our card acquiring license in Malaysia? Read on to find out.

We are excited to extend our payment processing offering to Malaysia via direct card acquiring licenses with major card schemes.

From June 2020, we'll offer direct card acquiring in Malaysia to merchants already leveraging our end-to-end payments solution. With our direct card acquiring license for Visa, Mastercard and JCB, transactions will be processed locally in Malaysia via the Adyen platform.

As part of our continually expanding global acquiring roadmap, which includes Europe, Latin America, the US, and Asia Pacific, the addition of Malaysia deepens our’s footprint in Southeast Asia – a key region of growth for local and international businesses.

Besides Malaysia, we offer full local card acquiring capabilities in Australia, Hong Kong, New Zealand, and Singapore in APAC.

Local acquiring advantages on top of end-to-end payments solution – all on one platform

Our local acquiring helps ensure the best card acceptance, higher authorization rates, lower transaction fees, and faster settlement for our merchants in the market.

Direct connection to major card schemes provides higher resilience for large transaction volumes and full transaction insights, which are instrumental in developing shopper strategies and future business decisions.

That’s on top of our end-to-end payment solution which encompasses payment gateway processing, risk management, and revenue optimization to provide businesses with rich data insights and greater business benefits, all on a single platform.

Catering to shoppers’ payment needs online and in-store

Malaysia’s shoppers are digitally savvy, with a high 83% internet penetration rate, and 97% of its 32.4 million population own a smartphone. While online banking is currently the most used payment method among the highly banked Malaysian population, mobile payments have become increasingly popular.

Whether they're QR-code, tap-and-go, or card-based payments, mobile payments have been on the rise even before the accelerated digitization pace in the region post the COVID-19 pandemic. Government initiatives to move away from cash, as well as businesses’ ongoing online and unified commerce strategies, have acquainted Malaysian shoppers with wallet payments such as GrabPay, Touch n’Go eWallet, and Boost on ecommerce sites as well as in physical retail stores.

"Having leveraged Adyen’s local acquiring solution in other markets, we are excited to enjoy the same benefits in Malaysia including a more than 3% increase in authorization rates which in turn improves customer experience.”

Franziska Bubl Senior Global Payments Manager, Delivery Hero

Our local acquiring license in Malaysia lets Adyen manage the entire payment flow. This means that businesses will be able to glean payment insights including purchase frequency, payment methods preferred, locations of purchases, if purchases were made online or in-store at the point-of-sale (POS) etc. These help brands better create unified commerce customer experiences to cater to shoppers’ evolving needs, enabling them to stand out in a retail environment that’s more competitive than ever.

Streamlined reporting and reconciliation

Currently, card payments, wallet payments, online banking, and convenience store payments form a large proportion of Malaysia’s payment mix.

To cater to these payment needs, merchants have had to work with multiple payment partners and contend with multiple reports, complicated fund settlement, manual reconciliation and refund processes. Not anymore – with our local acquiring in Malaysia, businesses no longer need to integrate with multiple partners to enable various payment methods. Once integrated with Adyen, adding payment methods is as easy as flicking a switch.

With Adyen local acquiring, businesses can simply connect with us to offer all key payment methods.

Our direct card acquiring capabilities in Malaysia means merchants can simply use our single platform to offer all the key payment methods that shoppers prefer, such as credit and debit cards, along with wallet payments. Of course, these include Chinese payment methods like Alipay, Union Pay and WeChat Pay.

Our single platform solution also extends to reporting. By streamlining all payment methods on the Adyen platform, settlement and reconciliation are also simpler. With just one report, confusion and inefficiencies are effectively reduced. A single report gives businesses a clear overview of all transactions, payment methods and customer insights.

Cost transparency and lowered fees with regulated interchange pricing

In line with Malaysia's government push for cashless payments, Bank Negara Malaysia’s regulated interchange helps reduce costs associated with digital transactions. Along with Adyen’s Interchange++ pricing model, merchants are assured of an optimized and transparent payment solution. How so?

First, let’s look at the costs to process a transaction. Card processing typically comprises 3 fees:

• Processing fee: Charged by payment provider for processing the transaction

• Card scheme fee: Charged by card scheme for using their network

• Interchange fee: Charged by the customer’s bank

These fees vary depending on the type of transaction, location, and business model, with interchange fees being the bulk of the cost. We offer interchange++ pricing which not only helps bring costs down, but also gives merchants greater transparency over blended pricing.

How do the 2 models differ?

• Interchange++ is a pricing model that tracks interchange rates, and any savings are passed down to merchants when interchange goes down.

• Blended pricing charges an average processing cost and a fixed markup, so every transaction costs the same but there’s no guarantee that savings will be passed on to the merchants.

Blended vs Interchange++ pricing: When interchange goes down, your costs go down.

With our local acquiring in Malaysia, businesses save more on interchange fees with regulated interchange in accordance with Bank Negara Malaysia’s Payment Card Reform Framework.

Businesses enjoy greater savings with Adyen’s Interchange++ and regulated interchange fees in Malaysia.

Plus, Visa and Mastercard grant lower rates (as low as 0%) to specific businesses like charities and government services. Learn more about the framework or find out more from us.

A strategic base to tap into Southeast Asia’s growth

There’s no better time than now to invest in Southeast Asia. Its internet economy has soared beyond US$100 billion in 2019, and will continue to grow to US$200 billion by 2025. With our local acquiring in Malaysia, companies are poised to take full advantage of the market’s thriving economy. Better yet, Malaysia presents a strategic base for companies to expand to Southeast Asia, with its proximity to markets like Indonesia, the Philippines, Thailand, and Vietnam.

Many international brands like foodpanda and Sephora are already utilizing our acquiring capabilities in Malaysia, and the same trusted Adyen end-to-end payments solution they are familiar with everywhere else in the world, as they continue to expand in the region.

Foodpanda, a member of the Delivery Hero family – the largest global food network outside of China and operating in 40+ markets welcomed the launch of local acquiring in Malaysia.

“As shelter-in-place laws in Malaysia went into effect, we saw transactions for our foodpanda delivery business rise by 40%. Having leveraged Adyen’s local acquiring solution in other markets, we are excited to enjoy the same benefits in Malaysia including a more than 3% increase in authorization rates which in turn improves customer experience,” said Franziska Bubl, Senior Global Payments Manager, Delivery Hero. “We look forward to expanding our partnership with Adyen as we scale to meet the growing needs of customers across Asia Pacific.”

Malaysia’s very own Fave commerce platform, which has been a partner of ours since 2016, is also leveraging our acquiring capabilities in Singapore and Malaysia for reliable and faster high volume transactions. This helps better serve Fave’s customer base spanning Malaysia, Singapore and Indonesia who shop online, in-app and in-store.

The payment partner that evolves with your business

Several studies have emphasized that Southeast Asia is at the forefront of a digital revolution. Mobile penetration among its 6.5 million shoppers is still growing as its internet economy thrives. Digital payments are gaining a foothold in food deliveries, ride hailing and ecommerce, while garnering interest for transactions at hawker stalls and food courts as well as grocery purchases.

In this region of high growth and diverse payment needs, it’s important to have a payments partner like Adyen that can evolve and adapt with changing business needs. Customer expectations and behavior are constantly changing, so data insights behind every transaction online, in-app and in-store are vital in understanding the shoppers and making better future business decisions.

Partnering with leading brands worldwide and in Asia including Facebook, Spotify, and L’Oreal, we’re always keeping a pulse on key payment methods consumers prefer, and trends in customer experience within the industries – so businesses are guaranteed the best business solution anywhere in the world.

Curious to learn more? Speak with our team today.

References:
GlobalWebIndex, Q2 2019
e-Conomy SEA 2019, Google, Temasek, Bain


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