KUALA LUMPUR: E-payment is the way forward for Malaysia to enhance competitiveness and to reduce wastage from costly payment instruments like cheques.
Bank Negara Malaysia governor Tan Sri Muhammad Ibrahim said at 120 million cheques currently this translates into an enormous cost of RM484 million.
The number declined by 42 per cent from 205 million cheques in 2011 due to various measures.
"At the current rate of decline, we are likely to achieve the Financial Sector Blueprint target of reducing cheque usage to 100 million in 2019, a year ahead of schedule," he said in a keynote address at the Payment System Forum & Exhibition 2017.
Cheque is costly to process compared to electronic fund transfer as seen from the increase in the unit cost processing by banks from RM3 in 2011 to RM4 in 2016.
In contrast, the cost of processing an Interbank GIRO and an Instant Transfer are about 30 sen per transaction.
Businesses also find it costly to handle cheques and average cost of processing a cheque RM6.80.
Cheque fee will be increased to RM1 from 50 sen beginning 2021.
To drive the migration to e-payments, the Instant Transfer fee of 50 sen would be waived for transactions up to RM5,000 per transaction for individuals and SMEs.
Muhammad stressed on the need to optimise debit cards, adding that mobile payment can complement the debit card as a low-cost alternative to cash.
Mobile e-wallet is a strong alternative to debit cards as merchants can accept payment through a QR code.
Most Malaysians are likely to carry both a debit card and mobile phones and there are 45.4 million debit cards and 42.8 million mobile phone subscriptions which is high for a population of 32.1 million, he added.