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Strong consumer demand driving cashless payments

Strong consumer demand driving cashless payments

KUALA LUMPUR: Malaysia, together with several major economies across the globe, are progressing ahead in adopting cashless technology across a wide range of sectors.

Driven by positive consumer demand, Malaysia is currently racing with top cashless transactions countries like Singapore, Netherlands and France, China and India.

The trend is now overtaking cash-based sectors such as retailers, restaurants, travel and tour-related industries who are now slowly migrating away from paper bills and coins to cashless.

The travel and tourism industry, one for example, are seeing a positive change in this trend.

In the recently concluded The Malaysian Association of Tour and Travel Agents (MATTA) event, or MATTA Fair 2018, bargain seekers are not only seen flocking booths that offer cheapest tour packages, but also was seeking information on digital currency product offerings.

Notably, at MATTA Fair, Merchantrade Asia Sdn Bhd, which offers its intuitive Merchantrade Money Visa prepaid cards, has seen a large number of customers at its booth registering for the services.

Clearly ahead of the game, the multi-currency prepaid card has already achieved over 100 million top ups since its launch six months ago, plus other more innovative money services offering.

Frequent traveller Tan Chee Ming said he registered for the card as it offers a very convenient way of spending while abroad without having to carry a bunch of currency notes around.

“I frequently travel to Asian countries, namely Vietnam, Myanmar, Thailand and China and I see cashless mode of payment to be very effective and useful when I am travelling abroad,” he said.

Today, financial technology or Fintech is pushing banks and financial service providers to change, changing the landscape and norms of conventional banking and transaction into the new digital cashless frontier.

Digital payments growth is currently a truly global phenomenon, sweeping across big economies, climbing strongly in Europe, the Middle East, and Africa (EMEA),

as well as emerging markets.

Tan said as the world going fully digital, convenience is now key and the invention of a new kind of money is necessary, with rising cashless lifestyle being the choice for many, especially travellers like himself.

Last month, a news report quoting a survey conducted by Visa Inc said Malaysians are becoming increasingly confident of going cashless.

It said six in 10 who said in the survey that they could do so for an entire day while close to half (41%) of those polled in the 2017 Visa Consumer Payment Attitudes survey also said they could last three days without cash.

Further, the report said almost 60 per cent surveyed said they had successfully done so for a few days, adding that more Malaysians were using payment cards, particularly among the more affluent segment.

Amit Kailash, an Indian national who is attached to local software company here, said cashless transaction has helped a lot in terms of sending money back to his home country, India.

“I used the conventional way for the longest time and now, with the introduction of cashless payments that are widely available here, I find it more convenient in terms of money transaction between Malaysia and India,” he said.

Amit said going cashless is definitely is the way to go as digital payments and mobile transactions are revolutionising the world of retail and banking.

Bank Negara Malaysia in a statement said ‘accelerating the country’s migration to electronic payments (e-payments) to quicken the pace for the country to realise the resulting cost savings and benefits has become a part of the Bank’s agenda to increase the efficiency of the nation’s payment systems.’

Moving ahead, a study by Statista showed total transaction value in the digital payments segment amounts to US$1.41 billion in 2018 and expected to show an annual growth rate (CAGR 2018-2022) of 16.4 per cent resulting in the total amount of US$2.59 billion by 2022.

The clear trends show digital wallets, smartphone or mobile payment are widely used in the Asia-Pacific region and the region leads the world in mobile payment penetration, according to information cited in ResearchAndMarkets.com report.