Cashless society is a distant dream in Malaysia
I will stick my neck out and bet on the fact that cashless society is a distant dream in Malaysia, not a chance it will be achieved in the near future in response to the concerns raised by many.
Given that there is a marked increase in cashless transactions, but that’s due to starting from a low base, not because of a marked increase in usage. There are many impediments to a total cashless society (which is probably not possible) and it is not necessarily just users’ caution and attitude.
Let’s start with the attitude of many merchants in Malaysia, whom I think prefer cash anytime.
Even when they accept credit card they impose a minimum charge policy which is detrimental to cashless pursuit. Those who impose this minimum spend policy are clueless of bank commission for credit card payments as it is either the same throughout or reduces as your credit card volume increases, so it does not make any sense to set this minimum policy.
The regulators say this is not against any law although the Association of Banks prohibit this but don’t really go out of their way to monitor and punish the recalcitrant merchants.
A restaurant in Petaling Jaya allegedly has a notice that says their credit card terminal is temporarily out of order; and the notice has been displayed for more than a year now.
Then we have cheque payments which apparently cost more than RM3 each per cheque.
If that’s the case, I would have expected the banks to not charge any fee of online transfers, both Inter Bank Giro (IBG) and Instant Transfer (IFT). If by not using cheques banks saves RM3 for each transaction, surely they should encourage customers to transfer online by not charging any fee?
With cheques, one can pay any amount but online transfers are limited to a maximum of RM40,000 or so depending on your bank. So of course cheques will not go out of fashion any time soon.
If you want to pay into your ASB or ASW 2020 operated by ASNB at any of its agent banks, you can’t use cheques, you need to pay it into your account first and once it clears, then it is transferred into your unit trust account. Another blow for convenience and cashless transactions.
Paying bills and services online is not as straightforward as one would imagine, it all depends whether the supplier has signed agreement with the bank you are using. It is not your choice which bank you can use for paying purposes; it is the choice of the service providers. Don’t you think this is bizarre? All banks, being part of the banking system, should be able to be used to pay any payment whatsoever but in Malaysia that’s not the case.
Instead of fixing that anomaly, Bank Negara has introduced another method of paying which is JomPay, but even this is only applicable if the service providers signs up for it, otherwise you can’t use it for payment.
Many car parks don’t even accept Touch ’n Go for payment, only cash accepted , which is a bummer. Some car parks are very expensive with a day’s parking costing in excess of RM50. They should accept credit cards for payment for the motorists’ convenience.
Some car park payment machines are so antiquated that you are not sure it will still function after putting your cash in. Strangely in Malaysia paying cash at parking payment machines is called AutoPay. Go figure.
Debit cards not widely accepted
Debit cards are not widely accepted in Malaysia; again this depends on merchants and vendors. A ridiculous situation we find ourselves under. In many countries the bank payment system (such as Giro) has been harmonised so that one can pay whoever and whatever we choose from our bank account. It is our choice, not that of the merchants or vendors.
In Malaysia, the situation is a combination of various ways which will drive you up the wall. Utility A, you must pay by certain bank or JomPay; telecommunication firm B is not on JomPay when everyone else is, and you either need to pay at branches or via its own website after registering or via selected banks; Service C is cash only.
There is no point in introducing more and more different ways of cashless transaction if the merchants’ attitudes are not fixed. The older generation will be reluctant to go completely cashless but the younger generation will embrace it. It depends on the convenience and the availability of a particular mode to pay your chosen vendor.
It is wrong to claim that cashless transactions will increase credit card debts. That’s incorrect. Many of us use credit card as a mode of payment and not to spend what we don’t have. Those who use credit cards for spending beyond their means have already been doing that.
Cashless transaction is not the driver of credit card debts. Lack of funds and lack of dripline is. Wanting to spend and enjoy now instead of saving up and spending for future is the culprit. Not cashless transaction.