KUALA LUMPUR, Jan 11 (Bernama) -- Malaysia is still some way away from transforming into a cashless society in the near term, mainly due to the spending habits among Malaysians who prefer to use cash for payments.
Payments Network Malaysia Sdn Bhd (PayNet) Group chief executive officer, Peter Schiesser, however, believed the country would be able to realise the cashless society aim within 20 years in the current digital era.
“In the digital era, it is very expensive for a country to print cash or for the retailers to handle cash.
“But it is not that the cash instrumental is going away tomorrow, it takes time, and we will move there eventually, maybe in 20 years,” he said on the sidelines of a media briefing on Malaysia’s payments ecosystem here, today.
Schiesser pointed out that currently, cashless society may not necessarily work in the rural areas where most of the country folks are still heavily relying on cash and have a lower degree of financial literacy compared with the urban citizens.
"That's where the country should play a role in educating those people to increase their awareness, that we can make a difference," he said.
However, he noted that the number of electronic payment transactions in Malaysia had shown a sharp rise since two years ago, thanks to the booming e-commerce market in the country.
According to the statistics from Bank Negara Malaysia, 833.9 million transactions were made via Internet banking from January to November 2018, from 741.9 million for the whole of 2017 and 588.2 million in 2016.
The statistics showed that mobile banking transactions also improved in the first 11 months of 2018, recording 1.92 billion from 1.05 billion for the whole of 2017 and 526.6 million in 2016.
However, volume of cash withdrawals from the automated teller machine dropped to 718.3 million from January to November 2018 versus 763.9 million for the full year 2017 and 761.2 million in 2016.
Asked whether it was necessary to fully transform Malaysia into a caseless society, Schiesser cautioned that over relying on digital payment would put a country at risks, particularly when the world is facing security threats and geopolitical concerns.
“For instance, the (mostly) cashless Sweden is facing a potential risk, which is, what happens if the (digital) infrastructure goes down? The country would just have no other way of working,” he added.
Hence, he opined that regulators were playing a vital role in ensuring the smooth functioning of the payment systems in a country.
Meanwhile, in a statement today, ACI Worldwide Inc said PayNet had implemented Malaysia's real-time retail payment platform using its UP real-time payments solution via the recently launched electronic payment service, DuitNow.
The United States-based real-time electronic payment and banking solutions provider said both parties are now focusing on the progressive introduction of new payments services, including QR (Quick Response) payment, as well as request-to-pay, e-mandates and real-time debit.
"The new payments services are expected to transform how businesses collect payments in Malaysia," it said.