Unified QR code one way to welcome no-touch payment
By Contributor |   |  Mainstream, Opinion

BY SOFEA AZAHAR

EVEN in a worst situation, there is always a silver lining as exemplified in the way the e-wallet industry has been “on a roll” due to less preference to perform payment activities that require physical touch or the hassle to carry physical wallets due to the Covid-19 pandemic.

But there remains a need to increase its convenience by accelerating the implementation of a national QR code.

Recently, a Mastercard Impact Study 2020 revealed that Malaysians’ usage of e-wallets in March-April already stood at 40%.

In the first four months in 2020, Bank Negara Malaysia’s (BNM) statistics showed that RM8.2 bil worth of e-money (can be in different forms such as card-based or network-based) had been transacted, much higher than RM4.7 bil in the first four months in 2019.

These statistics can be the leading indicators which suggest the rakyat’s willingness to become a more digitalised society particularly due to the health crisis.

E-wallet or digital wallet refers to a software-based system linked to an individual’s bank account which is used for online transactions through a computer or smartphone.

As of now, there are already 47 non-bank e-money issuers established in Malaysia and regulated by BNM. Non-bank issuers include Boost, GrabPay, Lazada Wallet, PayPal, Touch ‘n Go eWallet, BigPay, Setel, AliPay, ShopeePay and KiplePay.

There are also bank e-money issuers – AmBank, Bank of China, CIMB Bank, Malayan Banking, MBSB and RHB Bank.

What is good about digital transaction is that the system securely stores users’ payment information and passwords for various payment methods and all e-wallets require some form of verification before making payments which guarantees security.

This type of payment system also helps consumers to purchase goods easily, saves time, and allows direct money transfer to friends who are using the same applications.

Payments can be made in several ways including scanning a quick response (QR) code, or several e-wallet operators would provide physical cards.

The importance of migrating towards electronic payments which involves e-wallet was also reflected in BNM’s Financial Blueprint 2011-2020 in transforming our country into becoming a high-income nation.

As part of the plan to boost consumption and to encourage e-wallet usage, the government announced an e-wallet credit of RM50 in the Penjana package for all Malaysians aged 18 and above, and earning less than RM100,000 annually.

Prior to the crisis, the previous government Pakatan Harapan also adopted a similar measure with the RM30 e-Tunai incentive, via e-wallet operators namely Boost, GrabPay and Touch ‘n Go eWallet.

This crisis has definitely shown us the challenges that we have to brace for, is also an opportunity as Malaysia can use its current infrastructures to gain from it and continue improving on its digitalisation effort.

All we need to gain access to e-wallets is a smartphone, good internet access and the knowledge, which have been proven by statistics that we do have the resources.

The Department of Statistics (DOSM)’s statistics revealed that the access to smartphones within households has grown from 89% in 2018 to 91% in 2019. For internet access, findings also showed a rise from 87% in 2018 to 90.1% in 2019.

Nevertheless, this positive transition is yet to happen nationwide as it might not be the case for those who are underprivileged and are less exposed to digital technologies.

Another deterrent is the lack of trust. According to Nielsen Payment Landscape Report, 36% respondents worry about fake websites that masquerade as being from e-wallets while 39% worry about leaking of banking details.

Some still believe that it is easier to pay for goods and services using cash while some do not understand how e-wallet works, hence end up not using it.

Those aged 45-54 years prefer cash-on-delivery (COD) while doing online shopping.

So, it can be seen that the main issue here is the various perceptions on e-wallet convenience and safety. What can be done to change this?

As the e-wallets already ensure security as explained earlier, the other issue is convenience. There are plenty of e-wallet operators with multiple QR codes and one way to solve it is by consolidating them.

An example to learn from is Singapore which has a unified QR code initiated by the Monetary Authority of Singapore and Infocomm Media Development Authority that combines QR codes of different electronic payments known as Singapore Quick Response Code.

In achieving this goal, we are on track with BNM’s Interoperable Credit Transfer Framework in promoting collaboration between bank and non-bank e-money issuers via shared payment infrastructure and the current product now is called DuitNow QR that is operated by BNM’s affiliate, Payments Network Malaysia.

DuitNow QR is an extension to the existing DuitNow service which allows Bank customers to transfer money instantly and securely.

By using DuitNow QR, it will enable users to make payments from the participating banks or e-wallets while for merchants, they would only need to display one DuitNow QR code to accept payments to lessen the confusion and hassle for the users.

It requires no registration as well so long as consumers have participating bank’s mobile banking app or e-wallet app to scan the QR code.

However, this platform has yet to be launched widely on all e-wallet operators and banks. Hopefully, the broad-based launching would be realised in the next few months, which is needed to fasten and ease the process of digital transformation in Malaysia.

Alongside this common QR code initiative and probably more e-wallet credits from the government, the mentality of Malaysians also needs to be educated in becoming more digital-savvy and perhaps could be more targeted on the youngsters.

Embracing e-wallet can act as one of the stepping stones especially when we envision Malaysia 5.0 – human-centric society featured with the convergence of physical space and cyberspace – as the future for Malaysia that can help boost productivity and be more cost-efficient. – June 26, 2020

Sofea Azahar is research analyst at Emir Research.

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