M’sian consumers prefer cash over card: Nielsen

KUALA LUMPUR: Did you know that Malaysian consumers are among the least confident people in the world about shopping online, and that six in 10 Malaysians prefers cash as daily spending method?

According to a recent survey by Nielsen, 60% of Malaysian consumers say their preferred payment method for daily spending is paper rather than plastic.

The Nielsen’s Global Survey of Saving and Investment Strategies, which polled more than 30,000 Internet respondents in 60 countries, says Malaysians’ preferred form of payment is cash (60%), credit card (20%), debit card (14%) and prepaid card (2%).

This preference for cash was even stronger in the Philippines (74%), Thailand (68%) and Vietnam (61%).

“In general, reliance on cash is linked to lower GDP growth in developing economies: hence, increasing reliance on other payment methods is particularly important in these countries in South-East Asia,” said Luca Griseri, Head of Nielsen’s Financial Services in Singapore and Malaysia.

“Presently there are many options available for Malaysian consumers who choose to pay without cash (such as contactless technology). However, it is important to understand the barriers and reasons why many consumers in Malaysia prefer cash over credit cards,” said Griseri.

When it comes to cyber-safety concerns, more than half of Malaysian respondents (55%) say they are either hesitant or would not shop online and use their payment card details on either a smartphone or tablet device although their personal information is protected.

Consumers in Vietnam (54%). Singapore (51%) and Indonesia (50%) share the same view.

However, consumers in the Philippines (57%) and Thailand (55%) revealed that they feel comfortable shopping online using their payment card detailed stored on smart devices.

“In Malaysia, there is an opportunity to increase usage of other financial payment options through education campaigns,” said Luca Griseri, Head of Nielsen’s Financial Services in Singapore and Malaysia. “Malaysian consumers have the potential to increase usage of non-cash payment modes by leveraging on the country’s extensive usage of smartphones and mobile devices.”

“Efforts to decrease reliance on cash needs to involve different agents. Payment providers can educate consumers about the real costs of using cash and about safety and the benefits of using other payment alternatives. The government can educate citizens on using non-cash payment responsibly and contribute to the financial well-being of its citizens. Legislation and new technology are equally important and the latest payment cards in Malaysia are already equipped with the more secure EMV technology as compared to the magnetic strip.

“Finally, the involvement of retailers at the point of sale is crucial for consumers to embrace cashless payment alternatives,” concludes Griseri.

Nielsen’s information also shows that 42% of Malaysian respondents use one payment card on a regular basis, while 40% use two, and 11% use three. Only 6% of respondents regularly use more than three cards.