KUALA LUMPUR (Aug 12): Bank Negara Malaysia said electronic-based payments may result in savings amounting to up to 1% of a country's economy due to lower retail payment cost versus cash transactions.
The Edge Malaysia business and investment weekly, in its latest August 14 - 20 issue, quoted Bank Negara payment systems policy department director Tan Nyat Chuan as saying the central bank had been advocating a cashless society as cash was costly for the economy.
“A study by the European Central Bank in 2012 found that countries with high usage of cash and cheques incurred an annual retail payment cost of up to 1.43% of gross domestic product (GDP), whereas countries with high adoption
of electronic payments incurred an annual retail payment cost as low as 0.42% of GDP. So, going from paper-based to electronic payments could save a country up to 1% of GDP. These savings are significant,” Tan told The Edge Malaysia.
He said financial technology (fintech) disruption in Malaysia's payment backdrop was inevitable as electronic-based transactions became a norm here.
According to him, Bank Negara has been estabishing the necessary infrastructure and regulatory framework to ensure a smooth transition from cash-based to cashless-mobile payments.
“What you see in China, with digital payments, is likely to become a reality in Malaysia as well,” Tan said.
For a better understanding on Malaysia's electronic-based payment backdrop, kindly pick up and read the latest issue of The Edge Malaysia.