There has been a lot of talk about how we are moving towards a cashless society. But how viable is this in practice?
The question now is whether or not one can survive in Malaysia today while being truly cashless. To put this theory to the test, I took it upon myself to try to get by without having a single note or coin for 10 days.
After all, Malaysia has recorded 1.87 billion electronic money transactions between January and November 2021, amounting to approximately RM45.2 billion.
With so many merchants now working with cashless payments, how difficult could that be?
Week 1 Challenge
I decided to take on this challenge, starting with areas where I was pretty sure there would be cashless payment options available. It was a weekend, so I spent most of my time in the Kuala Lumpur/Petaling Jaya area, running errands, eating meals, and hanging out with friends.
Unsurprisingly, city centers and urban suburbs have apparently quickly embraced cashless payment options, whether e-wallets or paywave. Many mamak cafes and restaurants in these areas also tended to have at least the ability to pay with the Touch ‘n Go e-wallet.
All in all, the weekend spent in the city with no cash was generally painless and convenient. That said, I already encountered my first hurdle when I visited an afternoon bazaar in Kelana Jaya. It turns out that many of these roadside vendors still only deal in cash.
The first day and I’ve already failed the challenge. It was not going well.
Fortunately, the rest of the week went as planned. I spent my time in greater KL area like Aman Suria, Bandar Utama, Sunway and Kota Damansara. Generally speaking, these areas are well-developed suburbs and I had no trouble finding restaurants and entertainment that accepted cashless payments.
Week 2 Challenge
The following weekend, I decided to get a little more adventurous. The family hopped in the car for a quick road trip to Ulu Yam to try their famous lor mee. About an hour from Kuala Lumpur, Ulu Yam isn’t as developed as the suburbs surrounding the capital, so I assumed cashless payments would be a little harder to come by.
While yes, there weren’t as many places that offered cashless payments, there were still plenty of transaction opportunities with TNG eWallet and Boost — and even my debit card in a pinch.
For the final test, I decided to drive along the back roads of Ulu Yam towards the malls of Genting Highlands, stopping in front of the few roadside shops and stalls. To my surprise, even some of the more remote stores along these roads allowed me to pay for things via e-wallets.
At the end of my experience, I managed to go 10 consecutive days without using any money, as long as we don’t count that first weekend in Kelana Jaya. However, keep in mind that I spent most of my time in the urban areas surrounding Kuala Lumpur, only wandering off once to more remote locations.
Do we still need money?
As we can see from my experience, it is quite possible to live quite comfortably without money, at least in the city and suburbs around Selangor. Other parts of the country that are less developed may still be more dependent on cash.
But we are definitely and surely heading towards cashless. Many government agencies have implemented cashless payment options in one form or another.
In fact, 96% of Malaysians have used some form of cashless payment (cards, contactless and mobile contactless cards, mobile wallets and QR code payments) in the past year.
However, even if we manage to achieve this goal, there are still arguments as to why we should still keep money.
Promote financial inclusion
Certain vulnerable demographic groups depend on cash. For example, people of particularly old age may not be able to grasp and understand the concept of e-wallets or online accounts, thus depending on cash to get by.
Connectivity issues and system errors happen all the time. Over the past two years, when the pandemic necessitated online schooling and working from home, the lack of broadband network coverage affected many Malaysians.
Although we may be able to resolve some technical issues in the future, we will likely still encounter these issues from time to time. In the event that a store or company’s cashless payment system goes offline, physical cash is an important backup.
Unlike digital transactions, cash can leave virtually no footprint. Many may resent being asked for their details during digital checkout, along with the associated marketing and push notifications that may come with it. It also prevents companies from tracking your behavior through your shopping habits.
Cash can teach financial literacy
This applies to all parents with young children out there. Paying a cash allowance can help children develop saving habits throughout their lives. While one can also use budgeting apps to accomplish the same thing, the tangibility of money is hard to beat as an educational tool.
While a cashless society is an ideal we can strive for, it also needs Malaysians to improve their digital financial literacy.
A recent study by the Organization for Economic Co-operation and Development (OECD) found that Malaysians had below-average financial literacy, with more than 15% of Malaysians surveyed admitting to accepting investment advice from a scam, while 1 in 10 respondents had accidentally provided personal information to potential fraudsters.
Until we can reliably fix the many problems with cashless payment systems, cash is likely to stick around for the foreseeable future.
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