“Options can be provided. Cash is something that should be accepted for payments,” Bank Negara said.
KUALA LUMPUR: Bank Negara has given its firm commitment to supporting the continued use of physical cash in the country.
The use of physical cash appears to be increasingly sidelined globally now as economies around the world see a rapid adoption of cashless payments as a more convenient way to pay for goods and services.
An emerging trend is also seen today where a growing number of shops or retailers are also accepting only cashless or e-payments as settlement forms when selling their goods and services.
“Cash is still legal tender in Malaysia. The use of digital payments is only seen as complementary to cash and we do not envisage a move away from cash. Bank Negara will always support the cash economy,” said a central bank spokesperson in its Digital Payments Media Workshop.
Regarding retailers that are only accepting e-payments as legal tender in their shops these days, Bank Negara stressed cash is still very much legal tender in the country even though this appears to be a commercial decision on the retailer’s end.
“Options can be provided. Cash is something that should be accepted for payments,” Bank Negara said.
In Malaysia, DuitNow QR sees eligible small businesses still continuing to enjoy zero transaction fees or what is termed as the merchant discount rate (MDR).
Larger businesses can negotiate their MDR as they have higher bargaining power, said the central bank.
“As larger businesses have wider reach and we are talking about the large grocers such as Lotus’s or Mydin, they potentially have access to customers which may generate higher sales.
“So they are able to shop around and negotiate for a lower MDR and whichever party that can offer it to them, would be able to obtain that merchant as their client,” the Bank Negara spokesperson said.
“But for the micro, small and medium enterprises, our intent is for them to continue to benefit from zero MDR,” Bank Negara added.
The central bank also said it would continue to establish more financial linkages within the Asean region, more so especially when Malaysia assumes the chairmanship of Asean in 2025.
“For Malaysia, we have already established four linkages with Indonesia, Thailand and Singapore. The value for e-remittance transactions has increased more than 300% from 2019 to 2023,” Bank Negara said.
At least seven Asean countries have established payment linkages to enable cross-border QR payments and phone-to-phone (P2P) transfers.
From January to September 2024, Bank Negara data showed cross-border QR payment with Thailand, Singapore and Indonesia recorded more than 2.6 million transactions from around 700,000 in 2023; with transaction values at RM227mil from RM58mil last year.
The P2P linkage with Singapore which allows transfers to mobile phone numbers that went live in November 2023 recorded more than 21,000 transactions with RM6.1mil in transaction values, central bank data showed.
Bank Negara is now working on Project Nexus which is in phase four that will see it eventually joining a group of countries that would be able to establish cross-border payment linkages with up to 70 other countries.
“If we want to build linkages one by one, it will take a very long time. So bilateral payment linkages are not scalable. Project Nexus is attractive for Bank Negara. The plan is for PayNet to connect to Nexus, and with this, we are able to connect to all participants in the system,” Bank Negara said.
“We are preparing for live implementation. It has a market population of more than 1.7 billion people.
“There are two other countries that are special observers – Indonesia and the European Central Bank are also discussing joining Project Nexus – to be a global multilateral network to support the global economy,” the central bank added.
