WITH BankCard assuming the role as a multipurpose payment card, fewer single purpose prepaid cards such as telephone and toll cards are expected to be introduced into the market.
There would be a barrier for new entrants into the prepaid card market, said Dr Loke Yiing Jia of School of Social Science, Universiti Sains Malaysia.
Banking institutions would as- sume a more important role in the payment systems of the country as more non-cash payment instruments and transactions were coordinated via banking institutions, he said at the 15th Convention of Malaysian Economic Association last Wednesday.
He said the introduction of BankCard, which incorporated the ATM, debit and e-cash applications, would provide a larger segment of Malaysians access to non-cash retail payments.
As the conversion from ATM cards to BankCard was made compulsory for all current cardholders the consumer base of non-cash payment services of all local banks would have suddenly increased, he said.
Merchants/retailers are now guaranteed a critical mass of potential e-Pos shoppers and would be less reluctant to invest in an Electronic Fund Transfers at Point-of-Sale (EFTPOS) terminal that will enable them to accept non-cash payment in transactions, he added.
He said to make the e-government agenda a success, the challenge for the bank now was to provide adequate infrastructures to support and promote the use of e-cash and e-Pos, the paper said.
Instead of competing to attract more card holders, banks may now focus on attracting retailers and merchants to use their banks to process the e-Pos transactions, thus earning merchant discount, he said.
He said the shift towards non-cash transactions would naturally lead to a fall in the demand for money.
As a result estimating money demand would become more complicated, diminishing the central banks ability to influence the monetary environment by interest rate policy or open market operations, he said.
Loke said that as a result, the central bankers were not only faced with a greater challenge in supervisory control but also in implementing monetary policy. Bernama
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