PETTY traders and operators of mom-and-pop shops around the city find it hard to migrate to the cashless transaction system through the e-wallet platfom despite incentives.
Checks by the New Sunday Times at markets and food squares found that many traders are holding back on digital money.
Malaysian Federation of Hawkers and Petty Traders Association president Datuk Seri Rosli Sulaiman believed a shift would be challenging as most customers preferred to use cash.
‘We have yet to see any significant shift and change in the people’s mindset.
‘The grassroots economy is different because of socio-economic needs. As such, changing the mindset of the 1.5 million registered petty traders in Malaysia is not easy.’
He said many small-time traders, as well as customers, were not qualified to register on the e-wallet platform as they had been declared bankrupt.
He was drawing on the 80,000 Malaysians who have been declared bankrupt since 2015.
‘If we want to focus on improving the socio-economic status of the Bottom 40 group by targeting the commerce sector, we have to consider many factors that can help them achieve this.
‘Nevertheless, external headwinds are affecting Malaysia’s economy. All we see now are people trying to keep their businesses afloat and survive.’
Rosli believed the RM30 initiative through e-wallet platforms would enable the people to invigorate their spending power in a more sophisticated way.
‘We need to educate them on ways to adopt the system easily.
‘At the moment, traders from the older generation do not understand what it is all about.
‘They don’t even own mobile phones.
‘The percentage of those using e-wallets at markets and stalls is too small to warrant a transformation in the sector.’
He claimed that campaigns by e-wallet service providers were targeted at big timers and large outfits, adding that they did not offer much to small-time traders.
Rosli said last year, some e-wallet operators offered incentives to restaurant operators who set up stalls at Ramadan bazaars.
‘But hawkers and petty traders in Chow Kit and Petaling Street are still not warmed up to the system.’
He proposed that all stakeholders, including e-wallet operators and government agencies, find a more effective engagement programme to get traders to adopt the system.
Pre-loved clothes dealer Shahrin Darus, 58, who operates a shop in Chow Kit here, said he was in the dark about the system.
‘I heard people talking about it. But it sounds too complicated to me.
‘People my age, from traders to customers, mostly find it hard to break into the system.
‘All we want to do is go home with some money in our pockets. If it is digital money, that’s fine. But first, we need to understand how we do it.’
He said in order for petty traders to migrate to the cashless system, it was important for them to understand how they could benefit from it.
‘At the moment, many of us are not ready, so cash only, please.’
He believed that to break from the hard cash mould, it was important for the people to trust the system.
‘People still see the power of the money they have in hand, not something that is unseen. For us to believe in digital money, we first need to trust its benefits.’
Economist Dr Hoo Ke Ping believed that the cashless drive would not kill the grassroots economy.
He said the economy in Malaysia, and by extension in Southeast Asia, was unique.
‘Going predominantly cashless is not fully achievable in many Asian countries, although nations like Singapore are embracing it.’
Hoo gave an example of Taiwan’s experience with the cashless system, which saw people preferring hard cash for daily transactions.
‘Hard cash will remain king in Asian grassroots economies like Bangladesh, India and a few Asean nations.
‘By that extension, Malaysia will always have a shadow economy, with people who want to trade without a paper trail and receipts. This is why ringgit notes and coins are preferred.’
He said China’s grassroots economy had experienced a transformation in digital money.
‘I was told even beggars requested that payments be made via electronic transactions.’
Hoo said 25 per cent of Malaysia’s economy relied on the B40 group, while the rest depended on the middle-income earners and above.
He was concerned that the rising expenditure via electronic transactions would lead to high consumer debt among Malaysians, especially the younger generation.
Finance Minister Lim Guan Eng had said the government’s RM30 incentive was aimed at stimulating spending through the e-wallet system (via GrabPay,Boost and Touch ‘n Go eWallet) which would inject some RM1 billion into the economy.
The government allocated RM450 million for the initiative under the 2020 Budget.
E-wallet service providers are also giving out incentives to those who register with them.