Electronic Payment Systems Can Generate Annual Savings.

Electronic Payment Systems Can Generate Annual Savings.


Electronic-based payment systems can generate annual savings of up to one percent of the gross domestic product (GDP), Bank Negara Malaysia's governor Tan Sri Dr Zeti Akhtar Aziz said Tuesday.

Research showed that electronic-based payment systems could become a catalyst for promoting increased consumption spending while enhancing financial services to the unbanked communities, Zeti said.

"This not only promotes, for instance, the opening of bank accounts among the target group. It also enables them to enjoy a lower cost of financial services and a better means of saving, thus benefiting the economy as a whole," she said in at the opening of Mobile Digital Signature Symposium 2008 here.

The half-day symposium was organised by the Malaysian Communications and Multimedia Commission (MCMC) and themed "Building an Interoperable Platform with a Common Digital Identity for Secure Mobile Transactions in Malaysia".

Zeti said as electronic payment channels become more easily accessible, user-friendly and cheaper, it provided an opportunity to shift the remittance flow from informal to formal channels.

"Being a strategic tool to achieve higher economic growth, electronic payment increases operational efficiency and productivity levels through expedient payments and receipts of funds," she said.

"Accelerating the country's migration to electronic payments has therefore become a part of Malaysia's larger national agenda to increase the efficiency of payment systems and ultimately help improve the competitiveness of the economy."

Cash payments in Malaysia still accounted for a large portion of the number of transactions in the economy, but it is expected that this trend will level off in future and stabilise with the increased use of electronic means of payments, Zeti said.

She said credit cards, ATM (automated teller machine) cards and debit cards, including the e-purse application embedded in the MyKad, were among the card payment possibilities in the country.

"The increased use of cards is an international trend and is expected to gain significance in Malaysia. While considerable progress has been made in promoting the adoption of electronic payment with notable growth registered across all electronic payment methods, paper-based payment still remains the most popular form of payment," she added.

According to Zeti, cheques continued to account for a high percentage of the total non-cash retail payments while currency-in-circulation as a percentage of the GDP remained relatively high at 5.7 percent.

Malaysian consumers on the average made only 0.7 transaction via direct debit and credit transfer and 0.2 transaction through debit card transaction in 2006, she said, adding that this contrasted sharply with 84.7 and 109.5 transactions respectively in Sweden.

In this regard, Bank Negara has formulated an electronic payment roadmap aimed at bringing together relevant stakeholders to address the barriers that have impeded its increased adoption in a comprehensive and strategic
manner.

The roadmap, Zeti said, identified the priority areas requiring attention and collaboration to promote an environment conducive for the greater use of electronic payment in financial transactions.

Oman, Fatah. 2008. Electronic Payment Systems Can Generate Annual Savings.Bernama Capital Tree Sdn Bhd. https://www.money3.com.my/MalaysiaFinancialNews/NewsContent.aspx (accessed 03/06/2008).