By Leong Win Li and Heran Niruba
Malaysia is expected to go cashless in the next ten years, bringing more economical and societal impacts that you cannot imagine in the community.
A swish, and beep, and off you go.
The shopping routine in ten years’ time will no longer be stashes of paper in your wallet but a wave of your hand.
No more frustrating waiting lines, no more troublesome cash changes, and no more scowling cashiers at your service.
In ten years’ time, Malaysia will be evolving into a cashless society with the increasing acceptance on electronic money.
An economist and a professor of Universiti Sains Malaysia (USM) Graduate School of Business, Dr Chu Ei Yet said that Malaysia will have rapid development into becoming a cashless society in the near future in comparison with other economic development.
“This is a swift moving trend we can now see, given the current influences of China in terms of economy and business power,” he said.
Nevertheless, whether this trend would bring more good than bad to the society, still remains as a continuous debate among people.
Impacts of going cashless
When asked on the effect of electronic money on Malaysia, Dr Chu claimed that digital money would certainly have a positive impact on the economy.
“Our economy will develop faster as the turnovers between buyers and sellers have increased drastically with electronic money”.
“It will also reduce the cost of transaction on the overall economic value chain,” he said.
Both sellers and buyers are winners in the development of digital economy, however, that may not be the case for everyone.
Vice-President of hardware development of Opensys, Leong Yoke Wai expressed his doubts towards Malaysia turning into a cashless society, explaining that he believed the wide acceptance of digital money will lead to negative social impacts.
“One of the main issues that will emerge, is the increase in unemployment rate.
“People who handle cash payment, like cashiers, will eventually be replaced because with electronic money, all payments can be done with a machine,” Mr Leong said. On the contrary, Dr Chu sees this problem as a transition phase for business development.
“Any automation will lead to innovation disruption, however, it is up to the governments, institutions, and individuals to continue upgrading themselves,” he said.
Dr Chu expressed that the problem of unemployment will exist if the society is not alert and well prepared for retraining of the knowledge and skills that new jobs require.
“We could foresee a higher unemployment rate as institutions of higher education are not moving fast enough to align with digital economics development,” he continued.
Is physical money dying?
Aside from the impacts, the debate encircling the substitution of electronic money over physical money continues until today and no actual conclusion has been made.
However, looking at Sweden, a country that is leading in eliminating cash usage, was close to achieving a completely cashless country with only two per cent of their economy represented by cash.
Dr Chu also showed a great support in Malaysian economy turning digital in order to move in-line with the world development.
“Soon, you will see the disappearance of ATM machines. Transaction cost and time will be more effective and the society will become more productive,” he said.
So, electronic money killing off cash? Not necessary. Despite the convenience of digital money, not everyone favours going completely cashless.
A simple survey interview with the public has shown that a majority of them like the convenience of paying through mobiles and cards, but were reluctant in going completely cashless in their lifestyle.
The same goes for Sweden as not everyone is financially able to bank their money, sign up cards or cut off profits for the card transaction fees in their small businesses.
Souvenir shop owner Lee Boon Pin also mentioned that he does not accept digital payment if the customer’s purchase is lower than RM100 to prevent his loss of profit from the three per cent transaction surcharge.
The once future is near
Thus, electronic money will continue to thrive in Malaysia but it is less likely for it to replace physical money entirely in the near future.
This is indeed a debate similar to online news displacing the traditional news, and only time knows the answer to it.
Anyhow, the advancement of technology is boundless and unpredictable, and something that only appears in science fiction movies will eventually come true, such as the new “Smile to Pay” system introduced by Ant Financial.
Perhaps the once “future” you presumed is just round the corner, awaiting you to brace it.
So, are you prepared for the future?