As cash usage plunges by 64%, govt to help SMEs go digital

The use of digital wallets and contactless debit or credit cards has multiplied in the wake of the Covid-19 pandemic.

SEPANG: Cash usage has declined by 64% nationwide in the wake of the Covid-19 pandemic, Deputy Communications and Multimedia Minister Zahidi Zainul Abidin said today.

He said there was a 40% increase in usage of mobile or digital wallets, followed by contactless debit cards at 26% and contactless credit cards at 22%.

As such, he said, the government will focus on supporting small and medium-sized enterprises (SMEs) and their recovery by enabling them to go digital through access to e-commerce knowledge and cashless payments.

The Malaysia Digital Economy Corporation (MDEC) under the ministry today signed a memorandum of understanding (MoU) with Mastercard to advance the digitalisation of the economy and support the National Economic Recovery Plan’s (Penjana) digital initiatives.

Zahidi said the partnership would look at rolling out digital payment technologies nationwide for SMEs to sustain their businesses.

“Going digital for businesses means they can drive their revenues, as they can do financial transactions with customers and suppliers in a faster, secured and cost-effective manner, as well as access new marketplaces,” he said.

He said the government would begin looking into this soon, and was also looking at creating security firewalls to prevent financial hackers and data theft.

“The government has looked at ways on how we can get the budget to secure our data, to secure everything, so that the safety of the people is protected.

“There are some payment gateways we are trying to get information on, to how we may impose a certain fee for security. For example, if you spend RM1,000 or below, we charge 0.02% for security fees, for us to build a firewall.”

Noting a knowledge gap between urban entrepreneurs and entrepreneurs in the outskirts, Zahidi said MDEC was working on reaching out to rural communities through financial digital literacy programmes.

He said they would focus on businesses that sold halal goods or other Muslim products, as it made up a large portion of the SMEs, which were the “backbone of the economy”.

Mastercard country manager (Malaysia and Brunei) Perry Ong said going cashless could improve Malaysia’s gross domestic product and enable the economy to recover faster.

He said Mastercard would help the ministry and MDEC beyond the MoU to fast-track the capabilities of SMEs to survive on a long-term basis.

“If the government announces there will be a Penjana 2.0, we will be happy to work with it to see how we can facilitate the cash to reach the SMEs through possibly a Mastercard instrument,” he said, adding that they will receive their money in digital form. - FMT