Emerging Opportunities in Malaysia s Cards and Payments Industry

Transcription

1 Emerging Opportunities in Malaysia s Cards and Payments Industry Market Size, Trends and Drivers, Strategies, Products and Competitive Landscape Product Code: VR0888MR Published Date: January

2 TABLE OF CONTENTS TABLE OF CONTENTS 1 Executive Summary Market Attractiveness and Future Prospects of Cards and Payment Industry Analysis of Cards and Payment Industry Drivers Macroeconomic Fundamentals Stable GDP growth rate Overnight Policy Rate (OPR) Stable unemployment rate Malaysian Institute of Economic Research (MIER) consumer sentiments index Infrastructure Drivers Launch of secure online shopping platforms Emergence of contactless payments Migration to EMV cards MOLPoints Launch of mobile money Business Drivers Retail industry Growing mobile commerce Online shopping dynamics Outbound travel segment Card Fraud Statistics By channel Regulatory Framework Revised eligibility requirements for credit card issuance Business practice defined by Bank Negara Malaysia for credit cards issuers Regulations pertaining to credit card infrastructure security E-money regulations Emerging Consumer Attitude s and Trends Market Segmentation and Targeting Retail segment Corporate segment Consumer Preference Price Convenience Services Online Buying Behavior Preferred Payment Methods Competitive Landscape and Industry Dynamics Market Share Analysis by Payment Channels Overview of payment channels Credit transfer Checks Cards Emerging Opportunities in Malaysia s Cards and Payments Industry Page 2

3 TABLE OF CONTENTS Direct debit Debit Cards Market Share By bank By scheme Credit Cards Market Share By bank By Scheme Charge Cards Market Share Strategies Adopted by Key Competitors Market Entry Strategies Marketing / Product Strategy Debit cards Credit cards Prepaid cards Charge cards Pricing Strategies Market Size and Growth Potential of Payment Card Industry Market Share Analysis by Type of Card Total and Forecast of Card Industry Size Analysis by number of cards Analysis by transaction value Analysis by transaction volume Debit Card Category Size and Forecast Analysis by number of cards Analysis by transaction value Analysis by transaction volume Other key performance indicators Prepaid Card Category Size and Forecast Analysis by number of cards Analysis by segment open and closed-loop cards Analysis by transaction value Charge Card Category Size and Forecast Analysis by number of cards Analysis by transaction value Analysis by transaction volume Credit Card Category Size and Forecast Analysis by number of cards Analysis by transaction value Analysis by transaction volume Company Profiles, Product, and Marketing Strategies Maybank Strategies Maybank key financial Emerging Opportunities in Malaysia s Cards and Payments Industry Page 3

4 TABLE OF CONTENTS 8.2 CIMB Strategies CIMB Bank key financial RHB Bank Strategies RHB Bank key financial Public Bank (PB) Strategies Public Bank key financial Appendix Methodology Definitions Contact Us About Timetric Our approach Services Disclaimer Emerging Opportunities in Malaysia s Cards and Payments Industry Page 4

5 TABLE OF CONTENTS LIST OF FIGURES Figure 1: Current and Future Prospects of Various Cards in Malaysia Figure 2: Grow th Potential of Prepaid and Debit Card Transaction Value (%), 2012 and Figure 3: Grow th Potential of the Malaysian Cards and Payments Industry by Area of Usage Figure 4: Malaysian GDP Grow th Rate (%), Q Q Figure 5: Malaysian Overnight Policy Rate (%), January 2010 November Figure 6: Malaysian Unemployment Rate (%), December 2011 September Figure 7: MIER Consumer Sentiments Index, Q Q Figure 8: Malaysian Retail Industry (MYR Billion), Figure 9: Malaysian Smart Phone Penetration (%), Figure 10: Malaysia Mobile Commerce Sales Dynamics (MYR Billion), Figure 11: Malaysia Value of Online Shopping (MYR Billion), Figure 12: Malaysia Outbound Travel Segment Volume (Thousands), Figure 13: Malaysia Card Fraud Statistics (MYR Million), Figure 14: Malaysian E-Money Regulation Key Points Figure 15: Malaysian Cards and Payments Industry Segmentation Figure 16: Malaysian Young Population (Million), Figure 17: Malaysian Female Population (Million), Figure 18: Cards Targeted at Women in Malaysia Figure 19: Malaysian Volume of Outbound Leisure Tourists (Million), Figure 20: Malaysian Volume of High-Net-Worth Individual (HNWI) Population, Figure 21: Cards Offered to HNWIs Figure 22: Malaysian Volume of Domestic and Outbound Business Tourists (Million), Figure 23: Consumer Preferences by Card Type Figure 24: Number of POS Terminals in Malaysia (Thousands), Figure 25: Malaysia Volume of Domestic and Outbound Business Tourists (Million), Figure 26: Share of Malaysian Payment Channels, (%), 2008 and Figure 27: Malaysia Value and Growth of Credit Transfer (MYR Million), Figure 28: Malaysian Value and Growth of Check Payments (MYR Million), Figure 29: Malaysian Value and Growth of Cards Payments (MYR Million), Figure 30: Malaysian Value and Growth of Direct Debits (MYR Million), Figure 31: Malaysian Debit Card Category Share by Bank, (%), Figure 32: Malaysian Debit Card Category Share by Scheme, (%), Figure 33: Malaysian Credit Card Category Share by Bank, (%), Figure 34: Malaysian Credit Card Category Share by Scheme, (%), Figure 35: Malaysian Charge Card Category Share by Scheme, (%), Figure 36: List of Foreign Banks Operating in Malaysia Figure 37: Marketing Strategies Based on Card Type Figure 38: Co-Branded Credit Cards Figure 39: Promotional Credit Card Offers by Public Bank Malaysia Figure 40: Credit Card Pricing Strategy Figure 41: Debit Card Pricing Strategies Figure 42: Malaysian Cards Industry by Type of Card, (%), Figure 43: Malaysia Cards Industry Size by Volume (Thousands), Figure 44: Malaysian Cards Industry Size by Transaction Value (MYR Million), Figure 45: Malaysian Cards Industry Size by Transaction Volume (Million), Figure 46: Malaysian Debit Card Category Market Size (Thousands), Figure 47: Malaysian Debit Card Category Market Size (MYR Million), Figure 48: Malaysian Debit Card Category Market Size by Transaction Volume (Million), Figure 49: Debit Card Usage ATMs and POS Terminals (Thousands), Figure 50: Malaysian Prepaid Card Category Market Size (Thousands), Figure 51: Malaysian Open-Loop Prepaid Cards Category Market Size (Thousands), Figure 52: Malaysian Closed-Loop Prepaid Cards Category Market Size (Thousands), Figure 53: Malaysian Prepaid Cards Category Market Size (MYR Million), Figure 54: Malaysian Charge Card Category Market Size (Thousands), Figure 55: Malaysian Charge Card Category Market Size (MYR Million), Figure 56: Malaysian Charge Card Category Market Size by Transaction Volume (Million), Figure 57: Malaysian Credit Card Category Market Size by Volume (Thousands), Figure 58: Malaysian Credit Card Category Market Size by Transaction Value (MYR Million), Figure 59: Malaysian Credit Card Category Market Size by Transaction Volume (Million), Figure 60: Malaysian Credit Card Category Market Size by Frequency of Use, Figure 61: Cards Offered by Maybank Figure 62: Cards Offered by CIMB Group With Special Features Figure 63: Cards Offered by RHB Bank With Special Features Emerging Opportunities in Malaysia s Cards and Payments Industry Page 5

6 TABLE OF CONTENTS Figure 64: Cards Offered by Public Bank With Special Features Emerging Opportunities in Malaysia s Cards and Payments Industry Page 6

7 TABLE OF CONTENTS LIST OF TABLES Table 1: Malaysia Payment Channels (MYR Million), Table 2: Malaysian Card Industry by Type of Card, (Thousand), Table 3: Malaysian Cards Industry Size by Volume (Thousands), Table 4: Malaysian Cards Industry Size by Transaction Value (MYR Million), Table 5: Malaysian Cards Industry Size by Transaction Value (US$ Million), Table 6: Malaysian Cards Industry Size by Transaction Volume (Million), Table 7: Malaysian Debit Card Category Market Size (Thousands), Table 8: Malaysian Debit Card Category Market Size (MYR Million), Table 9: Malaysian Debit Card Category Market Size (US$ Million), Table 10: Malaysian Debit Card Category Market Size by Transaction Volume (Million), Table 11: Malaysian Prepaid Card Category Market Size (Thousands), Table 12:Malaysian Open-Loop Prepaid Cards Category Market Size (Thousands), Table 13: Malaysian Closed-Loop Prepaid Cards Category Market Size (Thousands), Table 14: Malaysian Prepaid Cards Category Market Size (MYR Million), Table 15: Malaysian Prepaid Cards Category Market Size (US$ Million), Table 16: Malaysian Charge Card Category Market Size (Thousands), Table 17: Malaysian Charge Card Category Market Size (MYR Million), Table 18: Malaysian Charge Card Category Market Size (US$ Million), Table 19: Malaysian Charge Card Category Market Size by Transaction Volume (Million), Table 20: Malaysian Credit Card Category Market Size by Volume (Thousands), Table 21: Malaysian Credit Card Category Market Size by Transaction Value (MYR Million), Table 22: Malaysian Credit Card Category Market Size by Transaction Value (US$ Million), Table 23: Malaysian Credit Card Category Market Size by Transaction Volume (Million), Table 24: Malaysian Credit Card Category Market Size by Frequency of Use, Table 25: Maybank Key Financial Indicators, Table 26: CIMB Bank Key Financial Indicators, Table 27: RHB Bank Key Financial Indicators, Table 28: RHB Bank Key Financial Indicators, Table 29: Cards and Payments Key Definitions Emerging Opportunities in Malaysia s Cards and Payments Industry Page 7

8 EXECUTIVE SUMMARY 1 Executive Summary While cash remains the dominant method of payment in Malaysia, there have been concerted efforts from issuers, the government and regulatory bodies to support card usage. The nation s credit card category has expanded rapidly. A large part of this growth has been driven by government initiatives, such as a reduction of income requirements for prospective cardholders and minimum monthly repayments. All of this has made payment cards far more accessible, resulting in significant growth for the industry. In 2012, the transaction value of debit and credit cards recorded respective growth rates of XX.X% and X.X% over figures from The industry value registered a CAGR of XX. XX% during the review period ( ) growing from MYRXXX.X billion (US$XX.X billion) in 2008 to MYRXXX.X billion (US$XXX.X billion) in Strong economic foreca sts and consumer confidence will benefit the industry Over the forecast period ( ), the industry is projected to grow from MYRXXX.X billion (US$XXX.X billion) in 2013 to MYRXXX.X billion (US$XXX.X billion) in 2017, increasing at a CAGR of X.XX%. The key drivers for this growth include a rise in disposable income levels, a positive consumer confidence index, a low inflationary forecast, positive employment opportunities and an increasing volume of corporate and leisure travelers. Malaysia is also expected to register high growth in terms of online and traditional retail revenues. E-money / prepaid cards dominate the industry In volume terms, prepaid cards dominated the industry with more than XX million prepaid cards in circulation in 2012 compare to only X.X million credit cards and XX.X million debit cards. The Touch n Go transit fare payment scheme has been in existence since 1997 and acted as a template for the development of contactless transaction platforms. In 2011, Bank Negara reported that the Touch n Go electronic payment system is the most popular cashless payment mode, handling over XX% of cashless payment transactions in the country. Touch n Go processes over X million transactions on a daily basis and transactions are around three times faster than cash payments when passing through transit or toll payment points. As of 2012, there were around XX million Touch n Go cardholders in Malaysia. In April 2008, Touch n Go incorporated a retail payment functionality into the Touch n Go card, initially for use at a range of fast-food merchants, cinemas and convenience stores. Since then, retail transactions using Touch n Go have increased, with XX% taking place in food and beverage outlets. Growth of contactle ss and NFC technology Contactless and mobile payments are being rolled out extensively across Malaysia. In April 2009, the world s first commercial near-field-communication (NFC) payment service for mobile phones was launched by Visa in conjunction with handset maker Nokia and payments facilitator Maybank. The Maxis FastTap service allows customers use Nokia NFC phones to make contactless transactions at over X,XXX Visa paywave merchant locations. Stuart Tomlinson, country manager for Visa Malaysia, said: Malaysia was the first place in the world where Visa trialed its Visa paywave technology, so it is only fitting that it is now the first country in the world to offer Visa paywave on an NFC-enabled mobile phone on a commercial basis. Emerging Opportunities in Malaysia s Cards and Payments Industry Page 8

9 EXECUTIVE SUMMARY Central bank regulations will reduce credit card volumes In March 2011, Bank Negara Malaysia (BNM) introduced new regulation pertaining to the eligibility requirements of credit cards. These rules limited the issuing of credit cards to those who have an annual income of MYRXX,XXX (US$X,XXX) or more. Before the introduction of this new regulation, the required minimum annual income for credit card approval was MYR XX,XXX (US$X,XXX). In addition, the new regulation limits the number of credit cards each individual can have to two cards for those earning MYRXX,XXX (US$XX,XXX) or less. These measures are undertaken to prevent mounting credit card debt in the country. The central bank has also restricted credit limits. According to the new regulation, the maximum credit limit a cardholder can utilize cannot not be more than two-times his or her monthly income. Adoption of effective security measure s resulted in a low level of card fraud During the review period, the central bank mandated the use of chip -based automated teller machine (ATM) cards and EMV standards for credit cards. Moreover, the introduction of transaction alerts via short message services (SMS) and the adoption of stronger authentication methods for online transactions has resulted in a decline in the value of card fraud during the review period. In 2012, the value of card fraud was MYRXX.X million (US$X.X million), registering a declining CAGR of -XX.XX% during the review period. Emerging Opportunities in Malaysia s Cards and Payments Industry Page 9

10 MARKET ATTRACTIVENESS AND FUTURE PROSPECTS OF CARDS AND PAYMENT INDUSTRY 2 Market Attractiveness and Future Prospects of Cards and Payment Industry The Malaysian cards and payments industry is expected to register a CAGR of X.XX% over the forecast period to reach MYRXXX.X billion (US$XXX.X billion) by the end of Given this growth rate, the industry offers significant growth opportunities for banks and non-banking card issuers. Over the forecast period, prepaid cards are expected to grow at a CAGR of XX.XX% as a result of the growth in the open-loop prepaid card segment which is projected to grow at a CAGR of XX.XX%, to reach MYRX.X billion (US$XXX.X million) in Closed-loop cards are expected to grow at a CAGR of XX.XX%. Figure 1: Current and Future Prospects of Various Cards in Malaysia Emerging Opportunities in Malaysia s Cards and Payments Industry Page 10

11 EMERGING CONSUMER ATTITUDES AND TRENDS 3 Analysis of Cards and Payment Industry Drivers 3.1 Business Drivers Retail industry The retail industry is one of the major areas where payment cards are frequently used by consumers. Growth in the retail sector directly affects transaction values. During the review period, the Malaysian retail industry increased from MYRXXX.X billion (US$XX billion) in 2008 to MYRXXX.X billion (US$XX.X billion) in 2012 at a CAGR of X.XX%. The key factors of such growth are low levels of unemployment, rising disposable incomes, greater purchasing power, a strong travel sector and promotional offers. Figure 8: Malaysian Retail Industry (MYR Billion), Emerging Opportunities in Malaysia s Cards and Payments Industry Page 11

12 EMERGING CONSUMER ATTITUDES AND TRENDS Growing mobile commerce The growth in m-commerce has been enhanced by the increased usage of smartphones, especially in developing countries such as the Malaysia. The increasing capabilities of smartphone devices, an exponential rise in mobile device applications and declining prices have been instrumental in driving m-commerce. Figure 9: Malaysian Smart Phone Penetration (%), Figure 10: Malaysia Mobile Commerce Sales Dynamics (MYR Billion), While a growing smartphone adoption offers an opportunity for mobile wallet services, fully-fledged support for this payment platform will only be possible through a greater acceptance from merchant acquirers. The growth of m-commerce is expected to drive the growth of the Malaysia cards and payments industry over the forecast period. Emerging Opportunities in Malaysia s Cards and Payments Industry Page 12

13 EMERGING CONSUMER ATTITUDES AND TRENDS Online shopping dynamics The growing market for online trade and e-commerce in Malaysia is one of the primary factors responsible for the expansion of the country s payment cards industry. Notably, although cash on delivery is emerging as a preferred mode of payment for online shopping, credit and debit cards still dominate the industry due to promotional offers such as discounts, coupons and co -branded cards. The benefits offered by online retail, such as its low costs and convenience, are expected to further increase credit and debit card ownership, as these factors encourage consumers to experiment with cashless purchases. Figure 11: Malaysia Value of Online Shopping (MYR Billion), Emerging Opportunities in Malaysia s Cards and Payments Industry Page 13

14 EMERGING CONSUMER ATTITUDES AND TRENDS 3.2 Card Fraud Statistics By channel The Malaysian central bank has taken number of steps for the safety and efficiency of prominent retail payment systems and instruments to maintain public confidence in using such systems and instruments. Operators and card issuers are required to adhere by the regulations including technical security standards, governance and risk management practices, an adequate transparency including a disclosure on fees and charges, effective anti-money laundering and the counter financing of terrorism (AML/CFT) measures. The value of card fraud in Malaysia declined from MYRXX.X million (US$X.X million) in 2008 to MYRXX.X million (US$X.X million) in 2012 at a CAGR of -XX.XX%. The decrease is mainly resulted from the industrywide migration to chip-based automated teller machine (ATM) cards and the EMV standard for credit cards. Figure 13: Malaysia Card Fraud Statistics (MYR Million), Emerging Opportunities in Malaysia s Cards and Payments Industry Page 14

15 COMPANY PROFILES, PRODUCT, AND MARKETING STRATEGIES 4 Competitive Landscape and Industry Dynamics Although cash may dominate in terms of payment methods, credit transfers, popularly known as the real-time electronic transfer of funds and securities system (RENTAS), accounted for XX.X% of non-cash retail transactions in 2012, according to data from the central bank. The value of card based transactions increased from MYRXXX.X billion in 2008 to MYRXXX.X billion in 2012, accounting for X.X% of the total market share non-cash payments. The dominant card scheme in Malaysia is that of Bankcard, an ATM card issued by domestic banking institutions which also serves as a debit card. In 2008, further efforts to widen the appeal of Bankcard included incorporating it as a payment option at credit card POS terminals. Focus is now being drawn on the promotion of Bankcard at government locations and petrol stations. 4.1 Market Share Analysis by Payment Channels This section explores the market shares of various payment channels and details how these channels have grown during the review period. The popular payment channels were checks, cash transaction, credit cards and credit transfers Overview of payment channels The payment channel structure changed significantly during last decade as new transaction methods have gained in popularity. The most popular payment channel is RENTAS. The share of card payment s increased from X.X% in 2008 to X.X% in Table 1: Malaysia Payment Channels (MYR Million), Payment Channels MYR Million, 2008 Market Share (%), 2008 MYR Million, 2012 Market Share (%), 2012 Credit transfer Check payments Cards payments Direct debit Total XX,XXX,XXX.X XX.X% XX,XXX,XXX.X XX.X% X,XXX,XXX.X X.X% X,XXX,XXX.X X.X% XXX,XXX.X X.X% XXX,XXX.X X.X% XXX.X X.XXXX% X,XXX.X X.XXXX% XX,XXX,XXX.X XXX.X% XX,XXX,XXX.X XXX.X% Emerging Opportunities in Malaysia s Cards and Payments Industry Page 15

16 COMPANY PROFILES, PRODUCT, AND MARKETING STRATEGIES 5 Market Size and Growth Potential of Payment Card Industry While cash remains the dominant method of payment in Malaysia, there have been concerted efforts from issuers, the government and regulatory bodies to support card usage. The credit card category has expanded rapidly, and a large part of this growth has been driven by government initiatives such as the reduction of the income requirement for prospective cardholders and reducing the minimum monthly repayment levels. This has made payment cards far more accessible. In July 2011, consumer discounts were offered at selected merchants and saw MasterCard report a XX% increase on credit and debit card expenditure, reaching US$XX million. While a large amount of this spending undoubtedly came from tourists from either Singapore or Hong Kong, it is a significant illustration of how the use of plastic has become increasingly mainstream in a country that is still predominantly rural. 5.1 Market Share Analysis by Type of Card Debit cards continue record strong growth rates, registering a review period CAGR of XX.XX% in volume terms and a CAGR of XX.XX% in terms value in In 2012, the volume of ATM withdrawals using debt card increased from XXX.X million in 2008 to XXX.X million. Charge cards accounted for only X.XX% of the total payment cards industry in For credit cards, over XXX.X million transactions valued at MYRXX.X billion (US$XX.X billion) were carried out in 2012, an increase of XX.X% and XX.X% respectively over figures from Contactless cards are also gaining in popularity eight issuers offer contactless cards in Malaysia, which can be used at more than X,XXX merchants. Table 2: Malaysian Card Industry by Type of Card, (Thousand), Types of Card: CAGR CAGR Debit card XX,XXX.X XX,XXX.X XX,XXX.X XX,XXX.X XX.XX% X.XX% Credit card XX,XXX.X X,XXX.X X,XXX.X X,XXX.X -X.XX% -X.XX% Prepaid card XX,XXX.X XX,XXX.X XXX,XXX.X XXX,XXX.X XX.XX% X.XX% Charge card XXX.X XXX.X XXX.X XXX.X -XX.XX% -X.XX% Total XX,XXX.X XXX,XXX.X XXX,XXX.X XXX,XXX.X X.XX% X.XX% Emerging Opportunities in Malaysia s Cards and Payments Industry Page 16

17 COMPANY PROFILES, PRODUCT, AND MARKETING STRATEGIES 5.2 Total and Forecast of Card Industry Size Card categories in Malaysia grew marginally both in value and volume terms during the review period. The cumulative average growth rate of the market size in volume terms is expected to grow by over X.XX% over the forecast period. The cumulative average growth rate in value terms is also expected to grow by nearly X.XX% Analysis by number of cards The industry grew at a CAGR of X.XX% in volume terms during the review period and is forecast to post a projected CAGR of X.XX% over the forecast period. The growth in the volume of closed-loop and open-loop prepaid cards is expected to drive industry growth. Table 3: Malaysian Cards Industry Size by Volume (Thousands), CAGR Total Cards Historical XX,XXX.X XXX,XXX.X XXX,XXX.X XXX,XXX.X XXX,XXX.X X.XX% Total Cards Forecast CAGR XXX,XXX.X XXX,XXX.X XXX,XXX.X XXX,XXX.X XXX,XXX.X X.XX% Figure 43: Malaysia Cards Industry Size by Volume (Thousands), Emerging Opportunities in Malaysia s Cards and Payments Industry Page 17

18 COMPANY PROFILES, PRODUCT, AND MARKETING STRATEGIES Analysis by transaction value The category size by transaction value, grew at a CAGR of XX.XX% during the review period from MYRXXX.X billion (US$XX.X billion) in 2008 to MYRXXX billion (US$XXX.X billion) in The overall category size by value is expected to grow at a CAGR of X.XX%, from MYRXXX.X billion (US$XXX.X billion) in 2013 to MYRXXX.X billion (US$XXX.X billion) in Such growth will be driven by an increasing demand for prepaid instruments. Table 4: Malaysian Cards Industry Size by Transaction Value (MYR Million), CAGR Total Cards Historical Total Cards Forecast XXX,XXX.X XXX,XXX.X XXX,XXX.X XXX,XXX.X XXX,XXX.X XX.XX% CAGR XXX,XXX.X XXX,XXX.X XXX,XXX.X XXX,XXX.X XXX,XXX.X X.XX% Table 5: Malaysian Cards Industry Size by Transaction Value (US$ Million), CAGR Total Cards Historical XX,XXX.X XX,XXX.X XXX,XXX.X XXX,XXX.X XXX,XXX.X XX.XX% CAGR Total Cards Forecast XXX,XXX.X XXX,XXX.X XXX,XXX.X XXX,XXX.X XXX,XXX.X X.XX% Figure 44: Malaysian Cards Industry Size by Transaction Value (MYR Million), Emerging Opportunities in Malaysia s Cards and Payments Industry Page 18

19 COMPANY PROFILES, PRODUCT, AND MARKETING STRATEGIES Analysis by transaction volume In terms of transaction volume, the Malaysian cards and payments industry grew at a CAGR of X.XX% during the review period, from XXX.X million transactions in 2008 to X.X billion transactions in Debit cards and prepaid cards transaction remained the key driver of such growth. Over the forecast period, the transaction volume of total cards is expected to grow at a CAGR of X.XX% to reach X.X billion by the end of Table 6: Malaysian Cards Industry Size by Transaction Volume (Million), Total Cards Review CAGR XXX.X XXX.X XXX.X XXX.X X,XXX.X X.XX% CAGR Total Cards Forecast X,XXX.X X,XXX.X X,XXX.X X,XXX.X X,XXX.X X.XX% Figure 45: Malaysian Cards Industry Size by Transaction Volume (Million), Emerging Opportunities in Malaysia s Cards and Payments Industry Page 19

20 APPENDIX 6 Appendix 6.1 Methodology All Timetric cards and payments reports are created by following a comprehensive, four -stage methodology. This includes market study, research, analysis and quality control. 1) Market Study A. Standardization Definitions are specified using recognized industry classifications. The same definition is used for every country. Annual average currency exchange rates are used for the latest completed year. These are then applied across both the historical and forecast data to remove exchange rate fluctuations. B. Internal audit Review of in-house databases to gather existing data: Historic market databases and reports Company database C. Trend monitoring Review of the latest cards and payments companies, and industry trends 2) Research A. Source s Collection of the latest market-specific data from a wide variety of industry sources: Government statistics Industry associations Company filings International organizations Cards and payments regulatory agencies B. Expert opinion Collation of opinion taken from leading cards and payments industry experts Analysis of third-party opinion and forecasts: Broker reports Media Official government sources C. Data consolidation and verification Consolidation of data and opinion to create historical datasets Creation of models to benchmark data across sectors and regions Emerging Opportunities in Malaysia s Cards and Payments Industry Page 20

21 APPENDIX 3) Analysis A. Market forecasts Feeding forecast data into market models: Macroeconomic indicators Industry-specific drivers Analysis of cards and payments industry database to identify trends: Latest cards and payments trends Key drivers of cards and payments industry B. Report writing Analysis of market data Discussion of company, and industry trends and issues Review of financial deals, and cards and payments trends 4) Quality Control A. Templates Detailed process manuals Standardized report templates and accompanying style guides Complex forecasting tool used to ensure forecast methodologies are consistently applied Quality-control checklists B. Quality control proce ss Peer review Senior-level QC Random spot checks on data integrity Benchmark checks across databases Market data cross-checked for consistency with accumulated data from: Company filings Government sources Emerging Opportunities in Malaysia s Cards and Payments Industry Page 21

22 APPENDIX 6.2 Definitions Table 29: Cards and Payments Key Definitions Category Gift cards Meal cards Payroll cards Travel currency cards Remittance cards Multi-purpose prepaid cash card Average transaction value Frequency of use Turnover per card Online spending through mobile Card penetration (per '000) Contactless cards Description Cards suitable for purposes such as key religious festivals or on occasions such as marriages and birthdays. The gift card can also be used by businesses as gifts to employees, vendors or clients. Cards specifically designed to replace paper voucher systems, offering employees a meal allow ance and eliminating logistical problems associated with procurement, stock-keeping and distribution of paper-based meal vouchers. Cards used to pay salaries to employees, eliminating the need to credit funds into a specific bank account. The payroll card is loaded w ith the salary or reimbursement due, w hich can then be spent by the recipient using the card. Cards targeting international travelers, generally available in multiple currencies. Cards targeting users who receive remittances from abroad. Cards that can be used to purchase various goods and services from affiliated merchants. The average value of transactions made through each card in a year. The average number of transactions made per card in a year. The value of transactions generated by a card in a year. Transactions made though mobile payment options. The average number of various card available per thousand people. The total number of NFC-enabled cards in circulation. 6.3 Contact Us If you have any queries about this report, or would like any further information, please contact info@timetric.com. 6.4 About Timetric Timetric is an innovative, fast-growing economic and business research firm that provides critical intelligence on emerging economies and key global industries. We provide detailed independent economic and sector research, business insights and authoritative, independent commentary, all delivered using sophisticated content delivery and data visualization technologies. We collect data through an extensive primary and secondary research network using robust methodologies, and highly innovative data acquisition and storage technologies. Our highly qualified teams of economists and analysts draw on their collective industry experience to deliver analysis, comment, opinion and advic e on the latest country and market trends and conditions. We provide extensive data services and commentary to influential business media operations around the globe. The Timetric product team is based in London, San Francisco, Hyderabad, Sydney and Singap ore, and consists of over 300 economists, analysts, journalists and researchers and a team of 40 software engineers. Emerging Opportunities in Malaysia s Cards and Payments Industry Page 22

23 APPENDIX Our approach All of Timetric s products and services are founded on three key principles: High-quality data All our services are grounded in high-quality data. We collect data in a number of innovative ways, including extensive business and consumer surveys conducted via our sophisticated market research technology, exclusive industry research programs and models, the systematic collection and curation of huge public data sets such as national statistics sites, regulatory filings and procurement databases, mining of business and government exhaust data, plus analysis of business and social media sentiment. Combined, the Timetric data assets consist of well over 1 billion time series and tens of billions of data points, creating a powerful resource for our data models, forecasts and analysis. Expert analysis Our intelligence services are provided by in-house teams of economists, analysts and researchers, working for programs that are guided by global advisory boards of leading economists and industry advisors. Our analysts collectively have decades of research experience and pedigrees from leading institutions. Timetric analysis draws on high-quality data sources, including proprietary panel and survey data, and is grounded in proprietary data analysis methodologies, analysis frameworks and forecasts. Powerful delivery and visualization tools We understand that our users want to spend more time analyzing information than finding it, so we have created a highly intuitive and extremely responsive user interface that organizes data in subject -specific modules, coupled with powerful search and index technologies to enable data to be easily found, classified and cross-referenced. The Timetric interface is designed by specialized UI experts, and built on a platform constructed specifically to enable fast, powerful access, visualizations and analytics of big data and content sets. 6.5 Services Timetric offers a range of economic, industry and consulting services. Economic intelligence services Timetric uses its extensive data assets, through the use of innovative technology, in order to produce thought - provoking analytical content delivered in the form of economic briefing services. We also enable users to access the data components that power this analysis, so that they can understand further, dig deeper or create their own assessments. Industry intelligence Our industry Intelligence Centers are premium web-based services that provide access to interactive tools, comprehensive research and expert analysis in key industry sectors. They provide invaluable decision support presented in an easily digestible format and grounded in deep research. Consulting Timetric specializes in the development and delivery of innovative research solutions that are designed to provide competitive advantage and profitability to our clients. Our cutting -edge res earc h processes, groundbreaking technology, and expert researchers and analysts can be employed to produce timely, cost-effective, insightful and actionable recommendations to support growth strategies. Emerging Opportunities in Malaysia s Cards and Payments Industry Page 23

24 APPENDIX 6.6 Disclaimer All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the publisher, Timetric. The facts of this report are believed to be correct at the time of publication but cannot be guaranteed. Please note that the findings, conclusions and recommendations that Timetric delivers will be based on information gathered in good faith from both primary and secondary sources, the accuracy of which Timetric is not always in a position to guarantee. Timetric will accept no liability whatsoever for actions taken based on any information that may subsequently prove to be incorrect. Emerging Opportunities in Malaysia s Cards and Payments Industry Page 24