Making cashless possible for all Malaysians

OVER the last few months, many Malaysians have begun warming up to the idea of eWallets as an alternative to cash. But while response to eWallets has been encouraging, there are some who face difficulty in making that lifestyle change as cash has been a very constant part of our lives up until now.

Recognising this, the Government and industry players are working towards addressing the biggest challenges in fostering greater adoption of e-payments. This includes building awareness and trust towards e-payments via outreach programmes, widening e-payment acceptance among smaller merchants and addressing gaps in digital connectivity.

To ensure no one gets left behind and foster a more inclusive adoption, Bank Negara Malaysia says that concerted efforts are being carried out to foster a sustained migration to e-payments. This means introducing measures to make eWallet payments affordable and convenient, improving accessibility by supporting initiatives to widen the merchant base, and strengthening awareness and trust.

“Migration to e-payments is a shared aspiration and an integral part of the digital economy, from which the country could benefit immensely. As we are actively striving to foster development of the digital economy, it is important to ensure all segments of the public have access to safe, reliable and convenient e-payment services, ” Bank Negara tells Sunday Star.One common complaint among users that eWallet payments processes are not uniform is currently being addressed.

“To provide an integrated and streamlined payment solution to merchants, the industry has also collaborated to launch the DuitNow QR service. With DuitNow QR, merchants only need to sign up with one e-wallet operator and display one unified QR code that can be used to accept payments from customers of other participating e-wallet operators, ” says Bank Negara.

To tackle issues of internet connectivity, Bank Negara says that the National Fiberisation and Connectivity Plan 2019 - 2023 (NFCP) launched by the Government last year will be a key enabler to ensure that the public has access to high quality and affordable digital connectivity nationwide.

Not only will the above measures expand eWallet acceptance among underserved communities, but adopting e-payments can in fact help the underserved communities to have access to safer, more efficient and convenient payment services.

“For instance, the elderly or the disabled with movement difficulties may pay bills, buy prepaid top-ups or conduct online shopping from the comfort of their homes, without having to travel the distance to withdraw cash and run their errands, ” Bank Negara explains.

On education, measures are being undertaken to instil behavioural change from an early age via initiatives undertaken by industry players to promote the usage and acceptance of payment cards and e-wallets in schools, colleges and universities.

Ultimately, Bank Negara stresses that the goal is not to replace cash altogether but to reduce the usage of cash so that the public can benefit from greater cost savings and efficiency, which would in turn enhance the nation’s productivity and competitiveness.

Infrastructure wise, Bank Negara says that Malaysia is ready for this change.

For an adult population of about 25 million, 95% have a bank deposit account with 45.8 million debit cards in circulation. Malaysia also has a relatively high penetration of smartphones at 78.0% and mobile broadband (4G) at 80% for users to access e-wallet services offered by both banks and non-bank e-money issuers.

“Supporting this are the underlying payment systems that are safe, reliable, efficient and continuously enhanced to support the future needs of the economy, ” it says.

“For instance, a Real-time Retail Payment Platform (RPP) has been implemented in Malaysia since 2018 for payments to be made seamlessly between bank accounts and e-money accounts through the use of common identifiers such as mobile numbers, National Registration Identity Card (NRIC) numbers and Business Registration Numbers (BRN), and via a unified Quick Response (QR) code, ” it adds.

The Covid-19 pandemic has accelerated QR payment adoption among merchants. According to Bank Negara, the number of merchant registrations for QR payments had increased to about 532,000 as at end-July 2020 compared to about 281,000 as at end-2019.

“E-payment methods such as contactless payment cards, QR payments and online banking provide consumers with a safer payment option by minimising contact and reducing the need for non-essential travels to bank branches and retail premises. Embracing digitalisation also help businesses future-proof in the new normal, ” says Bank Negara, adding that digitalisation encourages competitiveness among businesses.

But that is not the only benefit. A study published by the European Central Bank (ECB) in 2012 found that there is a potential cost savings of up to 1% of GDP if a country migrates from paper-based payment instruments to cost-effective e-payments.

Bank Negara assures the public that over the years, the financial industry has continuously undertaken measures to strengthen the security of payment services which include the adoption of multi-factor authentication, implementation of automated fraud detection mechanisms and relevant controls to mitigate cyber risks.

In embracing digital financial services including e-payments, Bank Negara also highlighted the importance for users to continuously upgrade their financial literacy so that they can make informed financial decisions and provide protection from financial fraud and abuse.