LETTERS: In the 2024 Budget, the government announced a framework to encourage cashless transactions.
Bank Negara Malaysia recorded RM11.5 billion in cashless payment transactions in 2023, an increase from RM7.2 billion in 2021 to RM9.5 billion in 2022.
Cashless transactions bring many benefits, including efficiency and speed, cost effectiveness, enhanced security, global accessibility, financial inclusion, and data insights and analytics.
Yet what is its impact on vulnerable people?
The scam by fake Samaritans in Johor recently is one example of the impact of digital finance on seniors, who lack the confidence and skills to use automated teller machines (ATMs).
When they struggled at the ATM, these "volunteers" offered to help, resulting in the fraudsters withdrawing the cash and disappearing.
This could have been avoided if banks had identified and helped senior citizens or vulnerable groups.
Better still, banks could allow these groups to do their services at the counter, or bank staff could help them in using the ATMs.
At the retail level, there are some outlets that deal only in cashless transactions.
If people, especially senior citizens or other vulnerable groups, ask to pay in cash, they are refused service.
China, the paragon of cashless transactions, is cracking down on those who reject cash payments.
In May this year, China's Central Bank fined seven businesses for rejecting cash payments of between RM1,900 and RM35,000.
These fines were part of efforts to ensure that physical currency continues to be accepted in the country.
The authorities in China had expressed concern about the implications of a cash-free economy on the elderly. It is illegal in China to reject cash payments, no matter what the preferences of the merchants are.
The number of cashless outlets in Malaysia is growing. Can we show the same concern for our senior citizens?
Sweden, which uses cashless transactions, is questioning itself if it has gone too far and too fast.
The rapid digitalisation in finance has resulted in the rise of scams and fraudulent withdrawals. For example, Sweden reported that welfare payment fraud increased from 9,000 cases in 2014 to 23,000 in 2023.
The Swedish Bankers Association suggests that it is indeed a challenge to find the right balance between accessibility and security.
Khazanah Research Institute has said that low levels of digital and financial literacy could hinder the uptake of digital banking.
Its research reports that senior citizens unfamiliar with technology struggle to find education, guidance and support. So they are more vulnerable to financial fraud and scams.
The Social and Economic Research Initiative, a think tank, said consumers in semi-urban and rural areas may be disadvantaged due to poor Internet coverage as well as a lack of access to devices.
It wonders whether enough is being done to provide Malaysian with digital financial literacy.
In our rush to become a cashless society, senior citizens and other vulnerable groups should not be left behind.
DR PAUL SELVA RAJ
Deputy president,
Federation of Malaysian
Consumers Associations
(Fomca)
The views expressed in this article are the author's own and do not necessarily reflect those of the New Straits Times