Is E-Wallet Payment King?

When it comes to cashless payments, e-wallets are Malaysians’ favourite way to pay. Electronic money (e-money), which includes e-wallets and mobile banking apps, has recorded the biggest number of transactions, compared with other electronic payment (e-payment) tools. A total of 3.65 billion financial transactions were done through e-money from January to September this year, based on data from Bank Negara Malaysia. This makes it the most popular e-payment method. Debit cards came in second at 1.45 billion, followed by credit cards at 678.4 million transactions in the same period. Only cheques and charge cards showed a declining trend in usage over the past five years.

E-money is a payment instrument that contains money paid in advance by the user, either in the form of physical cards or online apps. The number of e-money users or cards in circulation shot up by 116% from 78 million in 2019 to 169 million in 2023. As of September, this year, the figures continued to rise to 179.33 million users, according to Bank Negara. 

In 2023, the government rolled out its e-wallet initiative, which saw 10 million eligible adults under the B40 and M40 groups receiving a one-off e-wallet credit worth RM100. The data showed that the increase in e-money usage mainly involved network-based apps, rather than physical prepaid cards.

When it comes to the value of financial transactions, the story is flipped. Cheques had the highest transaction value among other e-payment tools, logging a total of RM681.1bil from January to September this year. In comparison, transactions through e-money only amounted to RM114bil within the same period. Cheques have also consistently recorded the highest cumulative value of transactions throughout the past five years:

 

The reality remains that the usage of cheques is on a decline. The data shows that the value of cheque transactions, although still exceeding the rest, has been shrinking over time. The value involving credit cards, debit cards, e-money and charge cards has kept growing through the years.

Experts believe that going cashless is a good thing for our country. However, cash will likely still be king in the years to come, or at least remain a relevant form of payment in Malaysia. It was reported that Malaysia aims to achieve 90% cashless payments by 2025, but some consumer groups have urged businesses to maintain cash payment options. And there are retail businesses that have “outlawed” cash payments. In other words, the ringgit is now not accepted as legal tender  – this cannot be the case! BNM must act on it no matter its preoccupation to be a cashless society.

That may be quite an achievement if we could raise the portion of total financial transactions to being 50% cashless by 2030. Cashless transactions rose by 32% in 2022 and 21% to RM11.5bil in 2023. Despite the double-digit growth, cashless transactions accounted for only 1% of the country’s total consumption spending in 2023.

For now, the data shows that the amount of cold, hard cash withdrawn from automated teller machines (ATMs) has dropped compared with 2019, before the Covid-19 pandemic. The amount shrank by 7.3% from RM427.8bil in 2019 to RM396.4bil in 2023. Fewer transactions are also being performed through ATMs, with 797.7 million cash withdrawals last year compared with 845.9 million in 2019.

The drawbacks of e-payments include technology outages, cybersecurity issues and scammers. From my perspective, cash and cheques will remain unless BNM “outlaws” them and moves into bitcoin! That’s hara-kiri for BNM!

Reference:

INTERACTIVE: When Malaysians go cashless, e-wallet is king, Yuen Meikeng, The Star, 

28 Nov 2024

17 Deaths A Day!

According to Deputy Transport Minister, 5,364 people died in road accidents in the first 10 months of 2024. That translates to an average of 17 people dying on our roads daily. That figure does not even include those who are injured, hospitalised or maimed for life.

Do we now treat these 5,364 deaths as just another statistic and move on? Why does the government’s response leave much to be desired? The death rates, injuries and vehicle damage have been rising despite numerous road safety campaigns. 

The Road Transport Department’s measures to upgrade and tighten the licensing syllabus, has no effect because we see more and more motorists disregarding traffic rules. In many reported road accidents, we often hear of “faulty brakes” and “loss of vehicle control” as the cause of accidents. 

 

Source: https://en.wikipedia.org

Netizens have extensively expressed their concerns and offered suggestions regarding the alarming number of accidents and unsafe conditions. 

So, do we continue to launch more campaigns? Or do we acknowledge this as a serious problem?

We need well-coordinated, sustainable enforcement over lengthy periods to instil fear and respect for the rule of law. Our antiquated road traffic laws must be changed to effectively punish vehicle owners and vehicle operators. We need to reshape our road works and raise maintenance standards to meet the ever-increasing traffic volume. We also need to tackle the problem of imitation, poor quality and substandard motor spare parts flooding the country. 

Motorists much be disciplined without fear. We must stop giving ‘discounts’ to law breakers. Such ‘pardoning’ will only further erode our societal value system.  Highway and road concessionaires, both private and government, must be exposed and severely punished whenever they fail to maintain their road stretches. If nothing meaningful is done, the statistic of 532,125 road accidents will remain just another number.

Of the total, the bulk is motorcyclists. They have no regard for life! Some wish to die! And if you happen to be at fault or otherwise, the motorcyclist is always right! How can we change? It is a behavioural problem that can only be fixed by incentives for good behaviour and deterrents for bad. And the MOT knows what to do but may lack the political will.

Reference:

7 deaths a day! Do something now about Malaysia’s road accidents crisis, JD Lovrenciear, Aliran, 21 November 2024

Petronas vs Petros: Who wins?

Malaysia’s national oil-and-gas company Petroliam Nasional Bhd, or Petronas, may lose a portion of revenue following the appointment of Petroleum Sarawak Bhd (Petros) as the sole gas aggregator in Sarawak.

The earnings impact to Petronas remains uncertain. Depending on the loss, the shift could affect its ability to keep up capital spending in the long term. Its current balance sheet remains solid, even with dividend commitment to the federal government.

The gas segment contributed about RM101 billion, or 30% to Petronas’ revenue in 2023. Petronas also delivered 403 liquefied natural gas (LNG) cargoes from its LNG complex and 38 LNG cargoes from two floating LNGs (FLNG) and 2.2 billion standard cubic feet per day of average sales gas volume in Peninsular Malaysia. 

On May 13, Sarawak announced that Petros will take over Petronas' role in all-natural gas trading activities in the state effective July 1. Petros and Petronas also agreed to sign a definitive agreement where Petronas will acknowledge Petros as the sole gas aggregator.

The agreement allows Petros to conclude gas purchase agreements with all upstream producers involved in the production of natural gas in Sarawak and gas sales agreements with all downstream buyers, foreign or domestic.

Consequently, Petronas will cease all buying and selling activities of the product in the state and hand over its natural gas distribution network and system to Petros. The gas business took up 22% of Petronas’ domestic capital expenditure, and the transfer to Petros may lead to a “more prominent” cut in the segment.

The Petroleum Development Act (PDA) of 1974 was an agreement made by all states, including Sarawak led by then Chief Minister Rahman Ya’kub. The deal was simple: if oil was found in waters adjacent to a state, that state would receive a 5% royalty.

This isn’t just about oil and gas—it’s about the future of Malaysia. If the current trajectory continues, we could see the collapse of one of the nation’s most valuable assets, dragging down the hopes and dreams of millions with it. The nation stands at a crossroads, and the decisions made soon will determine whether we remain united and prosperous, or whether we splinter, to everyone’s detriment. The solution isn’t simple, but it is clear: find a way to balance Sarawak’s rightful demands with the broader needs of the Federation. On 12 December, Bernama reported that the Federal Government and the Sarawak administration have decided on the gas distribution in the state between Petronas and Petros. Details are being fine-tuned. If that is the case, it is good!

Reference:

Petronas may lose part of revenue to Petros, capex may be hit — RHB IB, Jason Ng/  theedgemalaysia.com, 22 Jul 2024

PM announces gas distribution issue between Petronas, Petros settled, Bernama, 12 December 2024

                             

Water, Water, Everywhere!

Floods play out the same every year. The initial stories we see are about heavy rains and rising river water levels. Then we start seeing videos and photos of water flowing into the front gates and doors of houses, which is usually followed by social media postings of cars door -deep in water in the cities and towns. The cities and towns are the same too, usually in Kelantan, Terengganu, Johor, Kedah, and Perlis. Then our political leaders will release statements of how they have ordered the different assets available to focus on rescue and evacuation.

 

Source: https://www.wikiimpact.com

The authorities will also start updating the public on different sets of data like weather reports, the number of households affected, the number of evacuation centres being set up, and sometimes the death toll. 

What comes next is predictable. The same political leaders will start visiting the affected areas and promise cash aid of RM1,000 or something like that for each household. Photos and videos of them in life jackets on boats, or wearing boots wading through knee-high flood waters in between kampung houses will start appearing in the news.

As the days go by, resilient stories start appearing in the media. There will be photo essays and videos of children playing in the flood waters like it’s swimming pool, diving off roofs or traffic light posts and motorcycles dragging children in makeshift water skis usually made of basins. And stories of villagers fixing empty barrels to the bottom of beds and home appliances to keep them afloat will also appear.

Why can’t there be more steps that will help prevent the floods from ever happening? Or, at least from getting worse each year? Can’t our government and authorities spend more resources on thinking about proactive measures rather than reactive efforts? Don’t we have the technology to develop and improve our drainage systems? Can’t we build better flood- preventing dams and levees.

How about ceasing indiscriminate logging? We should have the capability of determining areas that are prone to flooding and just simply not build homes! What the country needs is a proper, long-term flood mitigation effort where all the relevant parties like the state and federal governments and communities involved work together more efficiently and effectively. We should put as much resources as possible into prevention and proactive efforts as we do for our annual rescue and evacuation efforts. Then, there is, of course, Kelantan which is resigned to its fate and is now planning to monetise its monsoon season into a tourism product!

Reference:

Comment: It’s flood season… again! Zan Azlee, Malaysiakini, 1 December 2024

Exams Abolished to Reduce Stress?

The abolishment of exams and exam-oriented learning in schools aims at reducing academic stress among students. That is our Education Minister’s statement recently. The Education Ministry is adopting an approach where the focus of learning in schools will be based on inquiry, exploration, experience, context and assessments that take into account the holistic development of students, she said.

The new approach aims to shift away from an exam-focused system and reduce stress on students, adding that it would offer a much more engaging learning ecosystem. The ministry prioritises the welfare and well-being of students, including their psychosocial and mental health.

 

Source: https://www.wikiimpact.com

Several initiatives have been implemented to identify students who are suffering from emotional disturbance issues. The Saringan Minda Sihat (Depression Anxiety Stress Scale test) is conducted once a year for pupils from Year 5 to students in Form Six, with students identified with severe emotional disturbance issues undergoing the screening twice a year. The ministry also provides access to psychoeducational materials through infographics, short videos, healthy mind pages, and self-wellness guides across various social media platforms.

Students identified with severe or very severe levels of depression, the school will hold a consultation session with the parents or guardians before referring the student to a medical specialist for the necessary treatment.

We don’t want stress. So remove exams. Why do we need SPM, STPM or university exams? Isn’t it stressful? How about in the work environment? Shouldn’t we work as and when we can? Because it is too stressful! How about marriage or family? Isn’t that stressful?

This idea of abolishing exams because of stress is plain silly! Granted there are people who have a problem with stress, but this is a fraction of the total. Couldn’t we cater for them while the vast majority are prepared to work through exams? It is a measure, it is a standard. Just look at Singapore, South Korea, Japan or developed nations, do they abolish exams? And why are they developed? Because exams and meritocracy leads them to progress!

Reference:

Exams abolished to reduce academic stress, says Fadhlina, Nor Ain Mohamed Radhi/Qistina Sallehuddin, New Straits Times, 26 November 2024

State-Owned Enterprises in Indonesia: Are Profits Important?

According to Leigh McKiernon in a blog, profits take a backseat for State-Owned Enterprises (SOEs) in Indonesia. Unlike their capitalist cousins, SOEs don’t waste their energy on objectives like shareholder value or profitability. Such pursuits are for mere mortals. Here, the goal is loftier: making the powers-that-be appear as the saviours of the nation.

It’s a theatrical production of epic proportions. Imagine governance colliding with the artistry of wayang kulit, where CEOs aren’t leaders but puppets, dancing to the rhythm of political masters. Politicians whose true performance metrics lie not in fiscal prudence but in the effusive applause of their social media followers. 

 

Source: https://en.wikipedia.org

To grasp the mystique of Indonesian SOEs, you must first abandon the quaint, colonial-era notion that businesses exist to generate profit. That’s the kind of capitalist propaganda you’d expect from people who still think ROI matters. Here, profitability isn’t just a secondary concern—it’s barely on the syllabus. For an Indonesian SOE, profit is like a decorative fruit bowl: nice to look at, but hardly integral to the feast.

What truly matters is alignment with the grand narrative. These enterprises aren’t judged on trivialities like efficiency or solvency. Is the SOE orchestrating a massive infrastructure project in time for election season? Marvelous. Is it creating jobs that look good on PowerPoint slides, even if those jobs involve six people supervising one shovel? Perfect. And if these initiatives rack up losses large enough to make a Big Four auditor break into a cold sweat? Well, that’s just a necessary sacrifice on the altar of prestasi.

If you think CEOs of SOEs in Indonesia are chosen for their visionary leadership or business acumen, think again. Forget meritocracy. The selection process here is more nuanced, a delicate balance of political connections, unwavering loyalty, and the rare gift of looking serene in the face of financial catastrophe.

Once installed, these CEOs aren’t bogged down by pedestrian goals like increasing revenue or trimming inefficiencies. No, their primary mission is far more important: ensuring that the ministry’s reputation shines like a freshly polished keris. The company’s survival? A secondary concern, at best. After all, if the enterprise falters, there’s always another bailout waiting around the corner.

Despite their well-documented inefficiencies, persistent losses, and occasional flirtations with outright chaos, SOEs in Indonesia excel in one area: public relations. Where some see failure, these organizations see opportunity. Where others see calamity, they craft a feel-good narrative. Every catastrophe is a “learning experience,” every misstep a “building block,” and every fiasco a mere “temporary glitch” on the sacred path to national greatness.

The genius here isn’t just in spin—it’s in the absolute commitment to spin. Public relations aren’t a side hustle; it’s their raison d'être. The business model may resemble a poorly built sandcastle enduring a typhoon, but if the narrative is intact, who’s keeping score?

In the end, the story sells. And in this game, perception isn’t just reality—it’s the only reality that matters. So, what if the company’s finances are in freefall? If the hashtags are trending, the mission is accomplished.

In Malaysia, are we trending towards that?

Reference:

State-Owned Enterprises in Indonesia: Where Profits Take a Backseat to Publicity, Leigh, McKiernon, www.linkedin.com, 4 December 2024

Employers Hesitant on PWP!

Lack of awareness and incentives on the progressive wage policy (PWP) are among the main reasons why it remains unattractive to employers, says the Malaysian Employers Federation (MEF).

About 60% of companies involved in the latest survey conducted by MEF on PWP admitted that they have limited awareness of various aspects of the policy. Only 11% of companies considered the incentives offered as being attractive, while 38% responded no, and the remaining 51% were uncertain according to MEF’s latest survey. Only five companies or 2% of the 262 that participated in the survey had applied for the pilot PWP that was held last June to August.

 

Source: https://www.wikiimpact.com

The recent allocation of RM200mil announced by the Prime Minister would only benefit about 60,000 employees, while the Malaysian workforce comprises about 4.5 million people.

Many business owners will be affected with the new policy, especially with over 90% of businesses in Malaysia being small and medium enterprises. If the business cannot afford it and such a policy is made compulsory, you would see a lot of businesses having to shut down, said the MEF president.

According to the New Industrial Master Plan 2030, SMEs contributed to 38.1% of gross domestic product (GDP), 13.5% to exports and employed 48% of the country’s workforce in 2020, which was below the targets set under the SME Masterplan 2012-2020.

SMEs make up some 97% of business establishments in the country. They are integral to the economy and are major employers, which is why they are crucial to the fixing of the problem.

A total of RM50mil was allocated for the implementation of the PWP pilot project, where participating firms receive a monthly incentive, with a maximum of RM200 per entry-level employee and up to RM300 for those who have been with the company for over a year.

I don’t know if the Human Resources Ministry (or Economy Ministry) worked-out this scheme with stakeholders. On the surface, it looks like they did not. And the PM made a budget point which looked good for a small proportion of workers and not helpful to the employers (and SMEs) or most employees.

Convincing any business to pay higher wages is never an easy task. Many business owners are not against the principle of what the government wants to implement under its Madani Economy framework. The reality on the ground is that not all industries are the same, not all companies are the same and there will always be challenges in implementing the Progressive Wage Policy (PWP), let alone adjusting the minimum wage higher. 

Shouldn’t the Government focus on growing the economy and let market forces dictate wages?

References:

MEF: Employers hesitant about PWP implementation, The Star, 28 November 2024

Reform wages now, not later, Fintan Ng, The Star, 9 November 2024