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
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