OFTEN times, we love to put the cart before the horse. We have done it again with the rush to a cashless system. Come July, the Immigration Department is going fully e-wallet. The National Registration Department has begun to accept digital payments, though it has not set a deadline for going cashless.
Going digital is well and good, but are all Malaysians ready? We think not. There are at least two reasons why we are not.
Firstly, e-wallet transactions require smartphones. And not all Malaysians have them. In a nation of 34 million, only 18.4 million owned smartphones last year. This is estimated to grow to 19.3 million this year. Subtracting babies and other young ones who can’t handle such devices, that still leaves a substantial number of Malaysians without smartphones.
To ask them to go cashless is asking them to do the impossible. Do not get us wrong. We are not suggesting that the government give each of them a smartphone. No, not at all. For them, cash is still king. And will remain so. It pays to give them a choice.
Secondly, Malaysia is fast becoming an ageing population. One estimate put Malaysians aged 65 and above at 2.3 million. In another 10 years, this number will reach 15 per cent. A substantial number indeed. And most of them would not be able to engage in cashless transactions even if they wanted to.
This is a reality those pushing for e-wallet transactions must live with. And this is not just a Malaysian problem. It is an Asian one. Take the case of China, where it is all Wechat and Alipay. There, too, not all of China has gone cashless. Some 15 per cent of Chinese are saying cash is king.
Even in high-tech South Korea, the story isn’t much different. According to The Paypers, the Netherlands-based news portal for professionals in the global payment community, cash accounted for 20 per cent of all payments in South Korea in 2018. Even the young — between the age of 20 and 30 — carried an average of US$60 in cash in their wallets. Ewallet is not for everyone, Asia seems to be saying.
Besides, there may be danger in rushing there too fast. Time for a Nordic moment. By March 2023, Sweden, which gave us the world’s first cash, will be the world’s first to go without it. But Swedes have been complaining of financial exclusion for sometime now.
On April 6, 2018, BBC reported thus: “Sweden is winning the race towards becoming the world’s first completely cashless society, but there are growing concerns it’s causing problems for the elderly and other vulnerable groups.”
Most banks don’t allow cash withdrawal or payments. Even buses are saying no to coins and notes. Olga Nilsson, a spokesman for the Swedish National Pensioners Organisation, which was then lobbying the government on behalf of its 350,000 members, put it to BBC thus: “As long as there is the right to use cash in Sweden, we think people should have the option to use it and put money in the bank.”
Most of the close to 900,000 pensioners in Malaysia must be wishing for a native Nilsson to plead their case. We join them to ask: why the rush off cash?