Penang mall where cash is not king

All payments at the mall are made using virtual money.
All payments at the mall are made using virtual money.PHOTO: THE STAR/ASIA NEWS NETWORK

GEORGE TOWN (THE STAR/ASIA NEWS NETWORK) - A man walks into a restaurant in a Penang mall, has his dinner, then walks around the mall doing some shopping. And he does not need cash or a credit card. Everything is paid for with virtual money.

There is a mall in Georgetown that is "specially dedicated" to an investment company in Penang.

The company offers returns of up to 24 per cent per annum with virtual trading of coins and has managed to lure more investors into the scheme with the shopping mall.

Besides clothing, accessories, electrical items, household products, digital gadgets and mobile phones, investors can even spend their virtual money in restaurants at the mall where all transactions are done in cashless terms.

The virtual money first has to be converted into "loyal reward points" in exchange for products and services at the mall.

Its members are not only Malaysians. The company, which has been in operation for several years, has even spread its wings overseas and counts among its members many Chinese nationals.

An investor, who wished to be known as Ng, said many people were confident about the scheme as it provided real products.

Ng said she travelled frequently to the mall from Kuala Lumpur just to spend her virtual coins.

"It is very convenient. I can shop and eat at nice restaurants in the mall. And everything is cashless," she said.

A basic package for the scheme would be US$5,000 (S$6,988) to buy 3,000 virtual coins from an agent.

An investor has to place RM22,500 with the agent because the conversion rate is fixed at RM4.50 to US$1.

The 3,000 virtual coins are then converted into 10,000 units. The base value is US$0.30 per unit.

The company which describes itself as a social networking services provider splits the units after six to eight months. This means 10,000 units becomes 20,000 and then 40,000.

Assuming an investor disposes the entire 40,000 at 40 cents each, they would end up with US$16,000 in virtual currency.

However, you can only convert 55 per cent of the US$16,000 into cash. The company buys it back at a fixed rate of RM3.80 per US$1.

Although there is a lack of transparency on how the company is able to generate such returns, a member who declined to be named seems fully convinced with the company's operations.

"Judging by the development, we can see the potential of the company in growing its business," said the member.

"Besides the mall, the company also has subsidiaries and other affiliated companies which are involved in tourism, entertainment, construction and properties. It is an open secret that the company owns a Chinese restaurant, hotels in Penang and even a theme park in Thailand," he said.