THERE is much talk about going cashless these days. Is Malaysia ready to go cashless?
Given the increase in the number of snatch thieves and convenient stores being robbed, yes, perhaps it is time for Malaysia to go cashless or use electronic payment systems, such as credit/debit cards, smartphones or Touch & Go cards. But, on a serious note, what would it mean, going cashless?
Changing to “cashless” would be good for our country, soon to be developed with a high-income status. It is more efficient and cost-effective because we no longer need to handle physical money or go to the bank to deposit or withdraw money. All transactions are to be done online or virtually.
Cashless initiatives are also in line with the Financial Sector Blueprint launched by Bank Negara Malaysia (BNM). According to the blueprint, for the next 10 years, BNM targets to increase the number of per capita e-payment transactions from 44 transactions to 200 transactions.
But, does emphasising online transactions provide significant benefits or just add stress and extra charges? What are the advantages of going cashless? For the government, the cashless society makes tracking and collection of taxes easier and committing fraud harder. Cash payments can be made invisible, but for every cashless transaction, there is a digital footprint.
We can get rid of wallets or purses to carry that wad of cash. We can also enjoy the convenience of digital transactions using credit cards, debit cards, mobile wallets and other online payment systems. Digital and cashless transactions have also paved the way for e-commerce where one can shop online from the comfort of home.
According to BNM, the main advantage of a digital payment system is that one will have the freedom to do the transaction at any time of the day and from any location.
There are so many mobile wallet operators today such as MOL (Money Online), AliPay, and MyPay that we are spoilt for choice. Many e-commerce sites, too, offer special discounts to consumers who make online payments.
Another advantage is when travelling abroad. Imagine a situation where you are abroad and you have just been robbed of all your cash and other belongings. You are now stranded with no money. What do you do? Well, of course, the first thing is to go to the nearest police station and report the theft. Next, if you are debit or credit card holder, you have to call your bank and tell them to do the necessary. And, most credit card companies will provide you with a new card almost immediately.
Hence, it can be said that going cashless provides lots of benefits and is convenient. Of course, there is the risk of spending more than what you have. Actually, cash helps us curb our spending. Other disadvantages are an increased risk of identity theft, phishing traps, online frauds and account hacking — all these will naturally rise as we grow towards digitisation.
But, I’m sure there will be a regulatory framework by the central bank to ensure a smooth transition from cash to cashless. And, there will be measures and laws to mitigate the risks of identity theft, phishing activities and hacking. There will also be the necessary infrastructure to monitor the transactions of banking institutions.
MUHAMMAD NAJMAN AHMAD PUAT
Universiti Sains Islam Malaysia