The cashless society is upon us and we are all in this together, like it or not! In a country like Malaysia, the objective is to become fully cashless by 2050 which seemed like a distant star away. But going cashless is no longer a wish for most societies today and countries like China and Singapore have already reached there.
Are you ready for this?
The one motivation about cashless payments is that mobile devices have become the main communication tool for people today. Malaysia has one of the highest numbers when it comes to adoption of mobile technologies in which nearly 80% of Malaysians use this but less than 35% use it for purchases.
Mobile devices have transformed the way we communicate and stay connected, and now it is also revolutionizing the world of retail and banking. Admittedly, Malaysians consumers are not yet embracing it as well as other countries, a study done by Nielsen showed that 78% of Malaysians use their mobile devices for social media, while only 34% used it to purchase a product or service. So the take up rate of digital payment is still quite low in Malaysia. This could be due to safety concerns, as the same survey showed that 72% of Malaysians are concerned about security of mobile payment.
A statement released by Bank Negara Malaysia (BNM) stated that among the reasons Malaysia is moving towards being a cashless society is for greater economic efficiency.
“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”- Bank Negara Malaysia
Adding to that, Khairy Jamaluddin, Youth and Sports Minister said,
“I think we cannot run away from how people will pay for things and how we will use cash and make transactions in the future, it will have to be cashless and contactless.”
Cashless, you say?
Being cashless today is very different from that of 10 years ago. Then, it meant using cards but now the landscape has changed tremendously. You could be using a cheque or a card but a payment instrument now is something totally different. It simply means not using anything physical anymore. This includes:
- online banking
- digital currency
- and many more
Samsung Pay has been quite significant in creating awareness through the use of their technology that adopts NFC (Near Field Communication) and MST (Magnetic Secure Transmission). You tap your phone on the terminal and the payment is done. Newer devices usually come with this.
Alipay from Alibaba
Considered to be still quite new, it is an e-wallet system. You store the funds and use them for online transactions. It has been around for more than 10 years now and is currently the largest mobile payment app in China. Besides purchases, you can use it to book hotel rooms and buy movie tickets while paying for things in 7-Eleven too.
Visa Checkout and Masterpass
These platforms are all about convenience. You register once for you debit or credit card and it is free of charge. Among the merchants accepting Visa Checkout include Malindo Air, Superbuy while Masterpass is accepted for movie tickets and hotel bookings too.
WeChat is the most popular messenger app in China. In Malaysia alone there are about 20 million users. Its payment engine allow you to buy products and services mostly online and in some stores too.
This is quite a new player in this market and is still very limited as compared to the others. Apple Pay works if you have an Apple device (iPhone) and it is interesting to see how it will fare with the other payment giants.
Putting it all together
Whether you are a consumer or a merchant, you cannot avoid the wave which is coming. The biggest problem is with the options that you have. There are too many choices to select and you risk losing out a target group if you do not accept a certain payment system. The best way is to embrace as many as you can.