Cashless adoption to reach 95% by 2025

PUTRAJAYA: Cashless adoption nationwide, under the collaboration between the Finance Ministry (MoF) and Payments Network Malaysia (PayNet), is targeted to reach 95% by 2025, says PayNet Government Digitalisation senior director Firdaus Ghani.

Firdaus said Selangor and Penang have already reached more than 90% with regards to the adoption of cashless payments at government agencies. The penetration of cashless payments in other states like Perlis, Kedah, and Perak are at 60%, 80% and 49%, respectively.

“The high adoption rates is firstly due to enforced willingness.

“Secondly, the presence of local champions are important. For example, the Mentri Besar in Selangor is pushing for cashless payment adoption by having programmes of going down to the field. Similarly, in Kedah, the Mentri Besar is actively promoting cashless payment adoption to reduce leakages and increase government revenue.

“Many of these local champions are in top management positions, including Mentris Besar, state financial officers and state secretaries,” he said during the prize giving ceremony for the recently concluded Cashless Boleh 3.0 campaign.

PayNet group chief executive officer Farhan Ahmad said the adoption of cashless payments is estimated to be a RM16mil uplift to the government with just this one campaign.

“By 2032 the net benefits to Malaysia by going cashless in absolute terms will be a 2.6% higher contribution to gross domestic product, or an incremental rise of 20 basis points each year for the next nine years – 92,000 more jobs for the country. There will also be an annual wage growth of 0.16% and annual productivity gains of 0.15%,” he said in his opening address.

Deputy secretary general (management) of MoF, Datin Rashidah Mohd Sies, said the government will continue to focus on driving efficiencies and transparency within the public sector.

“Public-private sector collaborations to advance the nation’s cashless agenda such as these are welcomed since it contributes directly to that goal. The efficiency gained by the rakyat in time and cost as they deal with a cashless enabled government is immense,” she said.

Meanwhile, deputy director-general of immigration Datuk Zakaria Shaaban said some of the challenges the organisation faced in the implementation of cashless payments were related to public acceptance and the lack of proper networking infrastructure, especially in remote areas.

The Immigration Department is one of the main revenue collection agencies for the government. It collected RM5.2bil in revenue for the government last year.

Previously, records showed that collections ranged from RM4bil to RM4.5bil.

“We faced issues such as bounced cheques, unauthorised payments and cash losses before implementing cashless payments. Therefore, we initiated a 100% e-payment system. After implementing this, all of these issues ceased to be problems.

“It cannot be denied that in the early stages, we encountered many challenges, including issues with customers’ acceptance. We then adopted a top-down policy approach, making it mandatory, starting in 2019. Then, we faced the Covid-19 pandemic in 2020, which provided more opportunities for us to fully implement e-payments,” he said.

Follow us on our official WhatsApp channel for breaking news alerts and key updates!


Next In Business News

Carbon tax conundrum
Ringgit looking up with US interest rate reversal
Holistic approach to developing data centres
China’s exports top forecasts but falling imports point to more stimulus
Lessons from Malaysia’s Silver State
Bracing for the CBAM impact
UK emerges as haven from global storms
Competition for medical tourists heats up among Asean countries
Empowering SMEs in their digital transformation
Sunview gains momentum on booming solar sector

Others Also Read