Apple Pay can be used in Malaysia already in any retailers that accept PayWave / PayPass. No additional hardware is required by the retailer. No Malaysian banks currently offer Apple Pay so you need an overseas Apple Pay account to use Apple Pay here in Malaysia.
I have been using Apple Pay on my iPhone or Apple Watch here in Malaysia to make contactless payments with no troubles. My Apple Pay account is linked to an Australian bank. Every time I pay with Apple Pay, the retailers are always surprised that it works.