CASH IN A FLASH - Malaysia

Many wary of mobile payments

Efforts are being made to promote a cashless economy in Malaysia.
Efforts are being made to promote a cashless economy in Malaysia. PHOTO: FOTOLIA

Cashless payments are growing in Asia with consumers lured by an increasing array of services, from smartphone payment apps such as e-wallets to stored value cards and cheap online interbank transfers.Many like the convenience and safety of not having to carry cash. But the growth is not universal, and, in some countries, cash remains king because of fears of identity theft as well as the lack of infrastructure and lack of knowledge of the digital world.

Efforts are being made to promote a cashless economy in Malaysia. For example, by the end of this year, drivers will no longer be able to use cash to pay tolls on any of the nation's 31 highways. Banks are also encouraging the use of debit cards for shopping.

Malaysia's e-commerce is growing at 9 per cent a year, with last year's revenue at US$894 million (S$1.25 billion) - a fraction of all transactions, and cash is still dominant.

Many everyday items, such as meals at a coffeeshop, are still paid in cash.

"The obstacles now are business readiness and investment in e-wallet readers," said Mr Chan Kok Loong, head of iPay 88, an online payment systems provider used by vendors selling goods and services.

He said that while the central bank wants more payment card terminals and readers to be deployed, the cost is too high for businesses.

"At the same time there is no single e-wallet that is prominent in Malaysia," he added.

Three-quarters of Malaysians are concerned about mobile payments due to security issues, a survey by Nielsen found. Mobile payments are likely to increase if security features are enhanced and incentives are given, Nielsen said.

Trinna Leong

A version of this article appeared in the print edition of The Sunday Times on March 19, 2017, with the headline 'Many wary of mobile payments'. Print Edition | Subscribe