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Payment Terminals vs. QR Code Payment: Which Is Right for Your Business?

In today’s fast-changing digital economy, businesses in Malaysia are under pressure to adopt efficient, cashless payment methods. With customers demanding convenience, speed, and security, two solutions often come up for SMEs: payment terminals and QR code payment. Both offer clear advantages, but which one is the right fit for your business?

Let’s break it down.

The Rise of Cashless Transactions in Malaysia

Malaysia has seen rapid growth in digital payments, driven by Bank Negara’s initiatives and the popularity of platforms like DuitNow. Micro SMEs and SMEs are now expected to provide cashless options to remain competitive. While E-invoicing in Malaysia is becoming mandatory to improve compliance and streamline financial reporting, adopting the right payment collection method is equally important for your business operations.

So, should you invest in a payment terminal or rely on QR codes? Here’s what you need to know.

What Is a Payment Terminal?

A payment terminal (also known as a card machine or POS terminal) is a device that allows businesses to accept credit and debit card payments. Modern terminals often support contactless payments, chip-and-pin transactions, and sometimes even e-wallets.

Key Advantages of Payment Terminals

  • Professional Customer Experience: Many customers still trust physical card transactions, especially in retail and F&B.
  • Multiple Payment Options: Accepts debit, credit, and contactless cards, making it convenient for customers.
  • Faster Checkout: No need for manual entry; transactions are processed in seconds.
  • Higher Transaction Limits: Ideal for high-value sales that may not be practical via QR codes.

Drawbacks

  • Upfront Costs: Hardware investment and potential monthly fees.
  • Maintenance & Connectivity: Requires electricity and stable internet connectivity.
  • Compliance Needs: Must follow PCI DSS standards for card security.

 

What Is QR Code Payment?

QR code payment allows customers to scan a code using their mobile banking app or e-wallet to complete the transaction. In Malaysia, DuitNow QR has become a standardised solution for businesses.

Benefits of QR Code Payments

  • Low Cost: No hardware needed; a printed QR code or digital display is enough.
  • Easy Setup: Quick to implement, especially for small businesses or pop-up stores.
  • Mobile-First: Perfect for customers who prefer e-wallets or online banking.
  • Contactless: Reduces physical interaction, which is an advantage post-pandemic.

Limitations

  • Transaction Speed: Depends on the customer’s internet connection.
  • Lower Spending Threshold: Customers may hesitate to make large payments via QR codes.
  • Device Dependency: Requires customers to have a smartphone and banking app.

 

Which Should You Choose?

The decision between a payment terminal and QR code payment largely depends on:

  • Business Type: Retail stores and restaurants often need physical terminals, while home-based or pop-up businesses can rely on QR codes.
  • Average Transaction Size: Higher-value businesses may prefer terminals for card transactions.
  • Customer Behaviour: If your customers are tech-savvy and mobile-first, QR might suffice.
  • Budget: Start-ups with limited capital may find QR codes more cost-effective.

Hybrid Approach

Many businesses in Malaysia use both methods to cater to different customer preferences. A hybrid setup ensures flexibility and convenience for all.

 

Regulatory & Compliance Factors

As E-invoicing in Malaysia becomes mandatory, businesses must align their payment systems with tax compliance. Integrated solutions that combine payment processing and invoicing will save time, reduce manual errors, and keep you compliant with LHDN requirements.

Future Trends in Malaysia’s Payment Landscape

  • Contactless Growth: Tap-to-pay cards and NFC-enabled terminals are on the rise.
  • QR Code Standardisation: DuitNow QR ensures interoperability between banks and e-wallets.
  • All-in-One Systems: Expect more solutions combining payment terminals, invoicing, and dashboards for SMEs.

 

Frequently Asked Questions (FAQ) About Payment Terminals and QR Code Payments in Malaysia

1. What’s the difference between a payment terminal and a QR code payment system?

A payment terminal is a physical device that accepts card payments (credit, debit, contactless), while a QR code payment system allows customers to scan a code with their mobile banking app or e-wallet to complete the transaction. Terminals are often used in retail, whereas QR codes are more common in mobile-first or lower-budget setups.

2. Which is more affordable for small businesses in Malaysia?

QR code payment systems are generally more affordable, as they don’t require hardware, have low or no setup costs, and are easy to implement. Payment terminals, while offering a professional experience, usually come with upfront costs, monthly fees, and maintenance.

3. Can I accept both card and QR payments in my business?

Absolutely. In fact, many Malaysian SMEs adopt a hybrid model using both payment terminals and QR code options to cater to different customer preferences. This improves flexibility, boosts sales, and enhances the customer experience.

4. What type of business is best suited for QR code payments?

QR code payments are ideal for:

  • Pop-up stalls and food trucks

  • Home-based businesses

  • Startups with tight budgets

  • Mobile-first or tech-savvy customers
    They require minimal setup, making them perfect for businesses that need a quick and flexible solution.

5. Can my POS system work with both payment terminals and QR payments?

Yes. Many modern POS systems in Malaysia integrate with both terminals and QR payment solutions, allowing seamless tracking of transactions and even linking to e-invoicing platforms like PAIDChain.

Final Thoughts

Both payment terminals and QR codes have a place in Malaysia’s digital payment ecosystem. If your business deals with high-value transactions and prioritises a professional checkout experience, a payment terminal is the way to go. If affordability and quick setup are your priorities, QR code payment might be enough.

Want to streamline payments and stay compliant with upcoming regulations? Explore modern solutions that combine payment terminals, QR codes, and invoicing in one platform.

Visit PAIDChain.my to learn how to future-proof your payment systems today.