Payment methods in Malaysia

Priscilla wrote:

Hello everyone,

Once youre settled in Malaysia, you will need to make some basic purchases, like groceries or pay bills. Hence, it is essential to know the payment methods available in your host country.

Which are the most common payment methods in Malaysia? Why would you prefer some forms over others?

Does the amount of money or the type of paid services (groceries, bills, rent, etc.) determine the choice of payment methods?

Are there any apps at your disposal which make the payment process easier in Malaysia?

Can certain foreign currencies be used to make payments?

Have your habits in terms of payment methods changed since moving to Malaysia?

Thanks for sharing your experience,

Priscilla

Hello Priscilla
We've only been here a couple days.  We use our Visa regularly (Chase) because of the excellent exchange rate on that card and little to no fees.  Where no credit cards are accepted we of course pull cash from ATMs. Only the Malaysian RM is accepted from what I've seen.  Seems the universal go to app here at the moment is GRAB.  Check it out.

I never use my credit cards because of the poor/unknown exchange rate and the international purchase charges.

I periodically transfer money to my bank account here and from the account pay net, electric, any monthly bills, and then withdraw by ATM for daily expenses like groceries, eating out, buying in shops, even up to washing machines and TVs. So basically I pay cash for everything.

For the first week to settle down, it is better to use Cash. Any foreigner (I think except Iran, etc., ) can register for new bank account easily, hence I suggest to open with your company offer letter along with your passport. 

For better conversion rate for your foreign currency, exchanges at places like Midvalley, Masjid Jamek, Pasar Seni have better rate.

If you have setup eWallet, you can do better transaction, without cash during your stay

Since i live here already 15 years I’m using local bank and bank debit card .

As digital payments are accepted in Malaysia, in most places, one would find it convenient. Carrying a lot of cash around has never been a good idea and there are plenty of ATMs. Small shops like eateries would take cash so keeping change is handy. Those guys are pretty particular about the quality of notes.

cvco wrote:

I never use my credit cards because of the poor/unknown exchange rate and the international purchase charges.

I actually do use my USAA credit and debit card quite a bit. They don't have any fees for such transactions and give me a great exchange rate. But I have a friend who was using Chase and he was being ripped off big time. But we use cash for most things, however bills such as internet/phone/cable, electric and water we use online bill pay. I usually just go to the bank and withdraw from my US account using the ATM and deposit the cash into my Malaysian account. But most of my income now comes from the US now.

ankamun wrote:

As digital payments are accepted in Malaysia, in most places, one would find it convenient. Carrying a lot of cash around has never been a good idea and there are plenty of ATMs. Small shops like eateries would take cash so keeping change is handy. Those guys are pretty particular about the quality of notes.

I fully agree with not carrying lots of cash, nor do we keep cash at home. My wife had a bad habit of carrying cash around, but having had her purse snatched broke that habit.

I am a US citizen subject to bank reporting issues with the Federal Government. That means if my bank account exceeds $10,000 there are reporting requirements. While I don’t have any illicit activities going on and the amounts in my Malaysian account are entirely used for legitimate needs, I’d prefer to avoid having the US gov’t involved in my acct. The money transferred is, after all, post-tax...and they have no evidence of criminal activity. I’m a firm believer in the 4th Amendment here...they should have a warrant to undertake what seems to be a fishing expedition.

I now use Transferwise to pay larger bills such as my rent as I can avoid having the payments go through my personal bank accounts abroad and thus set off the reporting trigger. I send the money from my home bank to my landlords bank. I use my local account to make smaller purchases and to replenish my fee free debit card.

Transferwise offers good exchange rates and low fees. On occasion I’ll use my home bank debit card...but the fees transaction is not generally as good as using my local banks own ATMs plus Transferwise. If I travel outside Malaysia the foreign fees might make the use of my home US bank debit card slightly better.

Hi Priscilla,

I have been living in Kuala Lumpur for over 2 years now and here is the insights I can provide to other fellow expats,

First of all in terms of groceries, there is a myriad of options, including visiting local supermarkets, like Tesco, Giant, Village Grocer etc, but my favourite one, which has always been my favourite even when I lived in Europe, is to buy groceries online and have them delivered to your home, there is ample choice within this option also, as the following offer online groceries purchase and home delivery:

1. tesco
2. honest bee
3. happy fresh

The most common payments in Malaysia are cash and card payment, either via pin insertion or contactless payment, some restaurants and local shops still do not accept card payments, although most would do,

As I do not have a local bank account one good option for me and for any expats, is to order a Big Pay card, you can download the app on your phone and order it, it will enable you to transfer money to it from your overseas account and use the card in Malaysia or anywhere else,

If you perform transactions with the card, either online or in person, you will only be charged the transaction's amount, if you chose to withdraw money, you would be charged RM 6 per withdrawal, but it is very convenient, as I am sure with an overseas account, if you were to cash out money or even perform any transactions in person or online, you would be charged by your bank a certain percentage extra...

As per bills payments, bills can be paid online, like electrics, wifi and water, although some foreign cards aren't accepted, or they can be paid by cash easily, I always paid them by cash, usually at 7 Eleven shops,

You asked: Does the amount of money or the type of paid services (groceries, bills, rent, etc.) determine the choice of payment methods?

Not really, but in some cases yes, some shops, in order to pay by card, require to spend minimum RM 50 to RM 100, for instance.

You asked: are there any apps at your disposal which make the payment process easier in Malaysia?

There are apps to pay electricity bills, for instance the TNB, usually the bills are on the landlord's name, so you would need their IC number in order to access billing data and history on your phone and possibly pay for the bill on it,

Can certain foreign currencies be used to make payments?

I have never come across this so I wouldn't be able to comment on it.

Have your habits in terms of payment methods changed since moving to Malaysia?

Some habits slightly changed, for instance in UK, where I previously lived for 13 years, I would be able to pay everywhere by card, except very rarely in some small local shops, but it is more common in KL and even more so in Malaysian kampungs, to find shops which do not accept payments by card,

Other than this I think Malaysia and especially Kuala Lumpur are much further ahead than other countries situated in Asia, such as Thailand and Indonesia, in terms of allowed payments methods groceries purchase.

Hope this helped!

Daniele

Good summary, Daniele.

Also check out Transferwise Borderless Account and debit card. Low fee transactions worldwide.

iskandarhack wrote:

cvco wrote:

I never use my credit cards because of the poor/unknown exchange rate and the international purchase charges.

I actually do use my USAA credit and debit card quite a bit. They don't have any fees for such transactions and give me a great exchange rate. But I have a friend who was using Chase and he was being ripped off big time. But we use cash for most things, however bills such as internet/phone/cable, electric and water we use online bill pay. I usually just go to the bank and withdraw from my US account using the ATM and deposit the cash into my Malaysian account. But most of my income now comes from the US now.

We are doing things almost the same. I use Chase and have to pay huge fees if that card even comes within 20 feet of an ATM! So, I transfer from US bank to local bank and withdraw by ATM. I just pay one time the transfer fee which is $54 for any amount. If I transfer $5000 then its just 1% and finished. For something like SS income, I just let it build up in the US account and then transfer in blocks instead of monthly. But if I book a plane to go back, like on China Southern, there is a foreign transfer fee which is a lot. The airlines dont offer other ways to pay to save those charges.

cinnamonape wrote:

I am a US citizen subject to bank reporting issues with the Federal Government. That means if my bank account exceeds $10,000 there are reporting requirements. While I don’t have any illicit activities going on and the amounts in my Malaysian account are entirely used for legitimate needs, I’d prefer to avoid having the US gov’t involved in my acct. The money transferred is, after all, post-tax...and they have no evidence of criminal activity. I’m a firm believer in the 4th Amendment here...they should have a warrant to undertake what seems to be a fishing expedition.

I should give you some news, then. Under FATCA, ANY amount is reported, not just over $10,000 as we might think.

When FATCA was underway I asked my bank if they were participating and they said flatly NO. I went into Bank Negara HQ and asked them and they said they had no plans about FATCA. Then went to the US govt FATCA website and it turned out Malaysia was not only in FACTA since the beginning but so was my bank which had flatly denied it. I went back to my bank and this time they said they didnt know if they were in or not.

Then I transferred $XXXX to it and then got a call that the bank could not release the money until I proved where I got it from in US and proof that I had paid taxes on it. I had to appear in the bank where we had a shouting fight and they finally agreed to release the money when a local agreed to take responsibility if the US govt made a problem. I asked WHY are they doing this? Answer: FATCA! And thats when I learned that even an account with $1 in it is fully reported. I still have the bank account ---and plenty of sleepless nights about one day logging onto the account and finding its been closed.

cvco wrote:

We are doing things almost the same. I use Chase and have to pay huge fees if that card even comes within 20 feet of an ATM! So, I transfer from US bank to local bank and withdraw by ATM. I just pay one time the transfer fee which is $54 for any amount. If I transfer $5000 then its just 1% and finished. For something like SS income, I just let it build up in the US account and then transfer in blocks instead of monthly. But if I book a plane to go back, like on China Southern, there is a foreign transfer fee which is a lot. The airlines don't offer other ways to pay to save those charges.

You might look at different banks, I use USAA (must be a veteran to use them) and there are no ATM fees or foreign transaction fees. I believe some of the brokerage houses have similar types of accounts. I did an an experiment once with a friend that had Chase, we both withdrew RM1000 and compared the amounts charged to our accounts. Mine had about $20 or $30 less for the transaction, which meant that Chase was charging that much in fees and poor exchange rates for every RM1000 he was withdrawing.

I know that when I transfer money (which I quit doing it unless no choice) directly into my account via wire transfer it ends up going through Maybank and I really get nailed on the exchange rate. Banks seem to give the worst exchange rates out there. That's on top of the $45 that USAA charged for the wire transfer. However it was the exchange rate that aggravated me the most. But there were a few times like buying a car, motorbike or house renovations that we had no choice. For things like airline tickets I still have (and won't give it up) a US credit card that I pay with and pay it with US funds.

Iskandarhack,

Yes....i understand and agree with you. And, i COULD be using my US ATM card from another bank but its the same story. US commercial, name brand banks are basically the same as to charges.

Previously, and for many years, I would fly back to KL with $10,000 in cash in my pocket and then put some in the bank and keep the rest at home in a box. This way, I could control the exchange rate by exchanging small amounts at whatever Moneychanger at the moment would give the best deal.  When TSA began giving people trouble for travelling with much smaller amounts of cash, i stopped doing that. Also, my US bank stopped storing much cash and when I would go in the day before the flight and try to withdraw $10,000, they wouldnt have it to give.

When I started transferring bank to bank, the scrutiny and arguments came, not only because of FATCA but because Malaysia is a Hot List country due to terrorist activity. My US bank would stop a transfer and ask what the REAL reason was for the transfer. I did it online and clicked "Family Support"  (the truth) and then I would get an email to call them. "What family? What support? Who is there? Why do they need this money?" So I reduced the amount of transfers and maybe they  thought $2-3-4,000 wasnt enough to fund a revolution so they let them go through. But isnt this situation ABSURD?

YOU WOULD THINK that with the world having gotten so small that taking money from one place and spending it in another would have become the simplest thing for an expat. For americans anyway, its not true and it will get harder due to Big Brother.

I'm looking for way to dump my local account and stop transfers too. If someone has an idea for this id like to know. Example, can i put my money somewhere else than a US bank and just use an ATM here?

cvco wrote:

I'm looking for way to dump my local account and stop transfers too. If someone has an idea for this id like to know. Example, can i put my money somewhere else than a US bank and just use an ATM here?

Sorry if I appear to be a Transferwise shill (I'm just a happy customer), but you could open the aforementioned Borderless Account with them. They will send you a debit card which you can use at pretty much any ATM in the world, plus any business that accepts Mastercard. It's not a bank account, per se, but it acts like one. Much better FX rates than the banks I've come across.

Cobolin wrote:

Sorry if I appear to be a Transferwise shill (I'm just a happy customer), but you could open the aforementioned Borderless Account with them. They will send you a debit card which you can use at pretty much any ATM in the world, plus any business that accepts Mastercard. It's not a bank account, per se, but it acts like one. Much better FX rates than the banks I've come across.

Wonder how that would work for Americans and FATCA. I suspect that being based in UK there would still be FATCA reporting.

Good point Iskandarhack....could write and ask them but doing that suddenly puts a person on the radar!

If you have followed FATCA, many banks outright closed americans accounts and/or refused to open for americans because the reporting work is tedious and expensive for a bank.

The rule itself applied to any bank that does any business with the US. Example, Maybank is in FATCA because they have a special office in the US for Malaysian companies to transact in, and for any banking work the US asks Maybank to do.  So which banks dont? Affin Bank is one that I think has no business in the US but they are so limited in services there doesnt seem to be a point to have an account there.

Americans always need backup plans. I have one, and truly think americans are better off doing everything possible to stay off the systems.

Re. FATCA. I don't doubt you are correct. They probably not only expect reports from banks and governments abroad, but also require the issuing banks in the US to report transfers abroad.

One good thing in  favor of keeping your local account below $10K is that YOU don't have to report it. Thus if you neglect to do fill out the reporting form and are over $10K there can be serious fines and penalties. If you need to go over $10K for some reason (MM2H Fixed Deposit, etc.) then you have to report it on your taxes...even if you didn't make anything on the account.

cinnamonape,

Yes, i think US banks are reporting transfers abroad because of fatca, specific destination, frequency of transfer, to whom, all reasons. Then a record piles up .....and....and.... worst of all, banks can so easily make a report for what they deem to be suspicious activity and then IRS moves in under civil forfeiture and your money is gone until you start fights with lawyers.

I ALWAYS reported on 1040 that i had a foreign account under 10K (truth) but fear the day is coming they ask for details of banks and dates for those small accounts too to try to uncover accounts, trusts, etc that werent reported in fatca. Yes, MM2H accounts start whole new problems when the over-10K account is opened with money not so clearly seen on a 1040.

Asking how expats pay bills in Malaysia isnt such a simple topic for some people!

iskandarhack wrote:

Cobolin wrote:

Sorry if I appear to be a Transferwise shill (I'm just a happy customer), but you could open the aforementioned Borderless Account with them. They will send you a debit card which you can use at pretty much any ATM in the world, plus any business that accepts Mastercard. It's not a bank account, per se, but it acts like one. Much better FX rates than the banks I've come across.

Wonder how that would work for Americans and FATCA. I suspect that being based in UK there would still be FATCA reporting.

Borderless accounts and tax

TransferWise Limited is a UK company authorised by the Financial Conduct Authority as an Electronic Money Institution. We are still evaluating the impact of the Common Reporting Standards, including FATCA, to our business and how we will adopt the new requirements. At this time we are not reporting this information to HMRC or any other tax authority.

Cobolin, thanks for that. I wonder when it was written.  Its worded strangely--
"we are still evaluating doing business with the US"
"we are still evaluating whether or not to let ourselves be forced to knuckle under to the jack boot of the imperialists" 
"we are still evaluating if we have a viable business model due to the boots on our neck by the fascists and their running dogs in the west"

In other words, the wording makes no sense as its written as FATCA isnt an opt-in thing but I will check out the site and see how it works.

Only a few years ago banking abroad for american expats was simple and only under the guidelines of the foreign bank itself. Today, nobody knows how the US rules would apply to the expats, nobody knows the details of the foreign banks roles in snooping and reporting, but problems occur without notice which can be most inconvenient when you are in the middle of planning or if you are planted and think everything is hunky-dory. Its all fun and games until it isnt and for that reason look for safer alternatives.

ankamun wrote:

As digital payments are accepted in Malaysia, in most places, one would find it convenient. Carrying a lot of cash around has never been a good idea and there are plenty of ATMs. Small shops like eateries would take cash so keeping change is handy. Those guys are pretty particular about the quality of notes.

I skipped over your point and it bears some comment. Money changers are half-crazy to make sure YOUR currency is good  but what about when you are changing back? While I dont know of anyone who took fake currency from a money changer or a bank, OF COURSE it can happen and frankly it should cause concern. Unless the person knows how to check for fakes, once you leave the counter its TOO BAD for you. I brought special pens from the US that allow a person to check for fake paper but I have not yet used them because I havent changed back any money.

Use cash, too many times using a local credit  card, 5 mins later I get a call from my bank  "are you in Los Angeles now?". The number of times I had my cards skimmed in Malaysia was ridiculous.

Nemodot wrote:

Use cash, too many times using a local credit  card, 5 mins later I get a call from my bank  "are you in Los Angeles now?". The number of times I had my cards skimmed in Malaysia was ridiculous.

That made me laugh. The last time I got skimmed they didnt even have the courtesy to wait until i GOT to Malaysia. I went from Los Angeles to China to here and used my card to buy something in the China airport. By the time I got to Malaysia I was already receiving emails about the liberal use of the card back in Los Angeles, the most recent purchase being $300 of groceries only five minutes earlier. Too bad Expat.com doesnt allow the liberal use of filthy, foul language because thats what I would otherwise be doing right now!!

These days there is no reason to let any waiter/clerk/whoever even touch your card. Use Paywave (very widely accepted in MY) and touch the card on the payment terminal. If you have to use pin, insert the card into the terminal yourself.

If you have a smartphone, use Samsung Pay or one of the many e-wallets (Grab, QR Pay, Boost etc) that can be used at many stores now.

If you're worried about online purchases, ensure that your bank has to send you a One Time Pin by SMS or email before they will allow the transaction to proceed.

I've had no trouble with skimming at all, neither with local nor international cards, and I'm pretty much cash free now.

Cobolin,

Your post is about exactly the problem i rail against.

1) Data is no longer safe and the online environment is the very place that data is least secure.  Hacks and breaches are common place, not to mention that the transmission of data itself over modems is literally being watched and grabbed at will (whether wifi or hard connections), leading to things like identity theft.

In the case I mentioned, my card was cloned and operational in a minute. There are cloning factories all over the place, China and Russia being the main ones.

2) I do not want tracking of my location, purchases, amounts or any activity which is either being sent to US or to China. The entire case and trouble involving Huawei phones is about the entirety of the phones data being sent to Beijing constantly. US, through NSA, is tracking and collecting all emails, calls, SMS, whatsapp, twitter, contact lists, forum posts and etc and stored in US and used by a number of countries. And like China, US is now moving towards a "social credit score" in which your movements, posts, etc create a profile. Low profilers will have trouble traveling, getting loans, buying guns, whatever they choose to block you about.

No data is safe and its entirely unknown how and when data can be used to hurt a person and for that reason I want as far away from the realm as I can get. What people give up for convenience in a digital world is personally astonishing. And, the more people absorb themselves in it and the more often they use it, the closer they are to disaster that will be untrackable by the user.

You or someone might say, "well, if you have done nothing wrong you have nothing to worry about," but thats far from the point. I simply do not want my govt or anyone else to know where Grab took me. Its not their business, why should they know and create a profile about you?

If I sound paranoid i'll tell you something interesting that changed my mind. A few years ago I went back to US to see my family and at Immigration at Los Angeles, I got asked a number of questions about why I stay in Malaysia and the questions were such that they could not have known except by tracking, hacking or something. They stare at a screen, they dont show you what they are looking at and they are asking questions based on that screen. This is a terrible privacy infringment and I refuse to feed the beast by maximizing convenience. Maybe you dont personally care that the world knows what you bought at Jusco last week but I do. A person can walk right past you with a device that will skim all your cards. I use protection for that and also dont take cards anywhere if I can avoid it.

The situation will get worse in Malaysia and elsewhere since it embraces a cashless world. While you might applaud the move, I will be the one you see running for the hills.

SO, this is why I use cash as much as possible, limiting trackable purchases to anything I cant use cash for, like bank transfers or airline purchases. I AM looking for a low-cost and secure way to transfer bank to bank and thats about it. I'll use cash until they ban it.

Pay wave is easily stolen. Keep up with the times!

Nemodot wrote:

Pay wave is easily stolen. Keep up with the times!

I want a credible, official source for that!

Here are some testaments to the contrary:

Is Visa payWave Safe From Digital Pickpocketing?

"Last year, there was an article published by a local daily claiming that contactless card is easily hacked by electronic pick-pocketers. It is said that there is an app for this which can be downloaded from Playstore/Appstore or an open source.

The said app is able to steal information like credit/debit card number, the card's expiry date as well as CCV by using an NFC-enabled device. It can scan your card from a 1-metre distance. Then, they can use that information to make transactions 'without authorisation', as well as to 'clone cards'.

Based on Amanz's review on the app, the data retrieved aren't enough to make any online purchase. What they got were the card number, the card’s expiry date, and the card’s transaction history. What was missing is the CCV number, which is needed when you're making an online transaction."

Is Visa payWave Really As Secure As They Say?

"Whilst there are staged demonstrations showing how credit card details could be lifted through a contactless card, this scenario is complex to execute in reality. While it includes the card number and expiry date, the data itself offers very limited potential for fraud.

Also, the contactless application of Visa payWave cards issued anywhere in Asia-Pacific, including Malaysia, do not electronically store the cardholder name onto the chip, thus, the cardholder’s name could NOT be extracted electronically. This is an additional measure to protect your personal information.....

Your CVV number printed at the back of your Visa card is NOT electronically stored in the chip. Thus, it can’t be extracted electronically from any device."

And finally, Bank Negara Malaysia:

"With regard to media posting in relation to “electronic pick-pocketing” of contactless cards, BNM would like to state that this is not true.

Contactless cards are equipped with safety features:
(a) An embedded chip that generates a dynamic code for every transaction
(b) For online card transactions, cardholders are required to enter a TAC (transaction authorisation code) that is sent to their mobile phones
(c) Important information on the card cannot be e-pickpocketed

With these safety features, cards cannot be cloned or used for unauthorised transactions by fraudsters."

Who's not up to date, then?