Malaysian Traders Push Back Against Cashless Policies

Malaysian consumer and business representatives have criticised the ‘undue haste’ with which the government is rolling out cashless policies, saying their members still prefer to operate using cash.

The Federation of Malaysian Consumers Associations (FOMCA) and the Malaysian Association for Malay Hawkers and Small Businessmen (MAMHSB) responded with concern to news that all government services are going cashless, with FOMCA’s President Marimuthu Nadason saying Malaysians were simply not ready for this, and the government was ‘rushing’ towards cashlessness.

Finance Minister Tengku Zafrul Aziz announced on 8 June that payments for all government services would be made cashless by 2022 as part of an ongoing push towards digitalisation.

Nadason expressed uncertainty that the Finance Minister—coming from a banking background—was familiar with the life of rural people, who he feels will be particularly badly affected by the planned changes. He questions the availability of reliable internet connections and people’s access to credit and debit cards, neither of which are required for cash-based transactions.

MAMHSB Secretary-General Zamri Mohammed feels traders are also not ready for a move to cashless, and agrees the policy will be especially problematic for those outside urban settings. While not opposed to the introduction of cashless payment options, he points out that small traders still prefer cash. During Ramadan, his organisation tried to encourage uptake of online transactions, ‘but the response was poor.’

Nadason believes the government’s focus should be on improving broadband access—with cracks in the system particularly exposed by higher usage during the COVID-19 pandemic, when schooling and many businesses were forced online—and access to banking, rather than prioritising cashless payments.