Like Indonesia, Malaysia is in the midst of accelerated ecommerce growth, driven largely by mobile.
Yet there are some significant differences between the two markets. Malaysian shoppers are comparatively open to cross-border shopping, with 40% of online transactions cross-border, and among Southeast Asian markets Malaysians are second only to Singapore in terms of credit card penetration and usage.
The growing use of mobile devices may herald an acceleration in ecommerce growth in the near term future, as mobile payments can be made from a mobile account instead of a bank account, which is particularly interesting considering that up to a third of the population does not have a bank account.
Malaysia has strong financial regulatory controls. Due to this, the Malaysian Ringgit is a non-tradable currency, which cannot be settled outside the country.
However, processing cross-border payments through an international acquirer does not trigger any International Issuing fee for the shopper.
This means merchants who take this approach are not impacted when processing Malaysian Ringgit cross border.
Finally, it is worth noting that in order to help clamp down on online fraud, local acquirers mandate 3D Secure as an additional layer of authentication of the customer.
What Adyen offers
For credit and debit card payments, Adyen can support merchants who prefer not to have domestic settlement, and enable access to one-click payment facilities without having to set up a domestic merchant account in Malaysia.
While a domestic entity is not required for international credit cards, it is important to note that it is normally required in order to access domestic payment methods, which account for a significant percentage of online transactions.
Adyen provides a unique offering that allows international merchants the option of domestic payment methods without having to be a local entity.
For local payment methods, Adyen offers a single integration that enables merchants to offer all major online bank transfer and cash-based methods.
In addition, merchants receive consolidated reporting and transaction level reconciliation, as well as the ability to settle funds outside of Malaysia in US Dollars (USD) while still allowing customers to pay in Malaysian Ringgit (MYR).
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