Obstacles on the road to cashless society

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IF you visit Bank Negara’s website on e-payment and debit card use, you will be surprised by the virtues stated there of using these payment systems.

In fact, Bank Negara had included e-payment as part of the nine focus areas in the Financial Sector Blueprint 2011-2020. The main reason was to accelerate the realisation of this country’s vision of being a high value­added, high income nation with adequate capacity to preserve financial stability.

In line with the Blueprint, Bank Negara aims to increase the number of e-payment transactions per capita from 44 transactions to 200 transactions, and reduce cheque usage by more than half from 207 million to 100 million per year by 2020.

To achieve this objective, a national e-payment roadshow was initiated in April this year to create awareness among individuals and businesses of the benefits of e-payment, its features, access and pricing, and to educate the public on safe practices when conducting financial transactions using e-payment. The following month, Bank Negara in collaboration with the National Cards Group (NCG) conducted merchant engagement sessions to enhance awareness and accelerate the adoption of PIN for payment card transactions among merchants.

All these efforts are indeed commendable but the current problem is the difficulty in using debit cards. Not many consumers are aware that there is a minimum amount they need to purchase before they can use debit cards. For some companies/ merchants, the minimum amount set is RM30; for others it is RM50. So what is this hype over e-payment all about when there are constraints and conditions that need to be met prior to using it? It also seems ridiculous and contrary to the central bank’s objective. The main contention is that there is no standard rule on minimum spending in order to cover the merchant’s service cost.

If one makes a comparison with Hong Kong where the Octopus card – an e-payment system similar to our Touch ‘N Go – is ubiquitous, there is no constraint on minimum spending. In Hong Kong, debit cards are not very popular as consumers either use their credit cards or the all-engaging and efficacious Octopus card.

In neighbouring Singapore, however, merchants do set a minimum amount of S$20. In Britain, the minimum of £5 spending rule in corner retail shops will be removed by 2020, and that was after much debate.

In order to realise the much-vaunted goal of being a cashless society, Bank Negara needs to tell the participating merchants to get their act together. For one, it should instruct all participating merchants to accept the debit cards with a more practical minimum amount of perhaps RM15.

DR THANASEELEN

Kuala Lumpur