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Earn interest instead of charging customers

A reader wrote to a newspaper complaining about charges imposed by Touch ’n Go Sdn Bhd to activate frozen cards not used for more than 12 months.

The fact that Touch ’n Go Sdn Bhd enjoy a monopolistic position allows it to dictate terms. If a parallel vendor were to install card payment machines side by side in all Touch ’n Go locations, such healthy competition is bound to benefit the rakyat.

Customers can then use their ATM cards, which are also debit cards, to pay for toll charges or train tickets.

Instead of deactivating the card if not used within 12 months and imposing charges to activate them, Touch ’n Go Sdn Bhd should do the exact opposite by assuring customers that the value in their cards will be retained indefinitely.

In this way, more people will store higher value in Touch ’n Go cards, even though some customers may misplace and forget about their cards.

I learned this trick 35 years ago when processing claims for lost American Express Travelers Cheques. I realised that a percentage of these cheques are not used, and some may be kept for so long until they are forgotten by the customers.

In any case, there is a time lapse for Touch ’n Go Sdn Bhd to receive cash from customers until the value stored in the card is used.

During this period, the money can be kept in the bank to earn interest, which will be quite substantial as the amount is huge. Surely this is a better strategy than inconveniencing customers as highlighted by the writer.

However, if the Malaysia Competition Commission finds the current arrangement is against the Competition Act 2010 (CA 2010), there will be no shortage of corporations vying to be the second vendor.

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