It’s no surprise that rising costs, fragile supply chains, and cooling demand are forcing Malaysia’s businesses to rethink their future strategies. But economic slowdowns don’t just test resilience – they expose inertia. While many of Malaysia’s SMEs have embraced digital transformation – with at least 90% of local SMEs with 10 or more employees transitioning to digital platforms1, a slew of challenges are still present. Limited understanding of financial tools, poor line of sight into finances, and constant exposure to theft and operational inefficiencies are daily battles to overcome.
Capitalizing on Cards
In today’s tight-margin environment, effectively managing working capital is the key to navigating financial pressures and seizing new opportunities. 8 in 10 SMEs fail due to ineffectively managing their cash flow. Even as financial institutions embrace digital and data-driven ways to assess SME credit risk and unlock tailored support in the digital economy, card adoption stands out as a simple yet powerful solution to deliver flexibility, security and control to key processes like vendor payments.
Businesses that accept cards are 14 percentage points more efficient at maximizing working capital than those who don’t. This is especially critical in volatile economic conditions, where liquidity and responsiveness are essential for resilience. Beyond checkout, integrating cards into unified API-driven platforms enable SMEs to automate reconciliation processes, reduce manual errors, and gain real-time visibility into cash flow. Research estimates that by simply digitalizing the expense process, businesses can save as many as 30,000 hours a year and boost productivity by more than 70 percent.
In Malaysia, most SMEs focus their digital efforts on basic front-end technologies such as computing devices and internet connectivity. More advanced tools remain underutilized, with only 44% adopting cloud computing and 54% using data analytics. With enhanced financial control and forecasting accuracy, SMEs won’t have to choose one or the other and can prioritize both innovation and growth.
When Progress Pays Off
For SMEs navigating uncertainty, your instinct may be to slow down investments in favor of stockpiling. But standing still poses a bigger risk. Around the world we see a robust ecosystem of digital platforms transform how SMEs launch, operate, and scale their businesses. In markets like the US and Chinese mainland, marketplaces have enabled small businesses to reach global customers. Several other platforms have also provided small players with access to financial services, logistics, and other capabilities once reserved for large enterprises.
Across the board, SMEs are equally capitalizing on the enhanced accessibility and added value services that these types of platforms have offered. Handmade Heroes for instance, a well-known skincare brand in the region, successfully leveraged e-commerce platforms to scale internationally — its lip scrub even achieved the No. 1 rank in its category on Amazon on May 2023. This example underscores the importance of embracing digital infrastructure not just for local growth, but for capturing international market share.
Malaysia’s accelerating shift toward e-payments presents a significant opportunity for SMEs to enhance efficiency, reach, and competitiveness, both in consumer transactions as well as B2B and commercial transactions. In 2024, e-payment transactions rose by 19% to 409 per capita—meaning the average Malaysian now makes more than one digital payment daily, compared to just once a week a decade ago. Meanwhile, e-invoicing mandates has made digital payments increasingly important and commonplace in B2B settings as well. The integration of digital payment gateways and other fintech tools is empowering local SMEs to improve business efficiencies and better manage their cash flow.
It’s clear that modernizing your payments infrastructure can bring critical value during this period of flux. However, it can also be a daunting undertaking – one with plenty of unknowns, a plethora of partners to choose from and murky regulatory complexities to overcome. But the path forward is clearer than you think. Getting started is as easy as A-B-C:
- Audit: Audit current payment and reconciliation touchpoints to identify automation opportunities that reduce risk and delays. When combined with a unified payment platforms with global reach, open APIs, and built-in reconciliation tools, your operations move from fragmented to focused.
- Bridge: The right partner doesn’t just provide the tech; they’re the bridge to operational excellence and sustained growth. They’re a trusted guide that minimizes risk and recognizes that small steps lead to big changes. Together, you’ll solve real challenges and drive meaningful change every step of the way.
- Checkout: In an increasingly digital-first era, your checkout is the last – and often most decisive – touchpoint with a customer. A frictionless payment journey boosts conversions and cements loyalty: when every tap, scan or click feels effortless, customers come back.
Card-based solutions may not be the cure-all, but they can be the catalyst for transforming working capital and operational pain points into competitive advantages. Ultimately, progress does pay off – especially for those who move first.
- According to SME Association of Malaysia, February 2025 ↩︎
