MALAYSIA: E-wallets are now Malaysia’s most popular payment method, outpacing other electronic payment methods.

While Malaysia, like Singapore and the rest of the world, is on a journey towards becoming a cashless society, experts warn of the huge risks of being a cashless society.

Singapore and Malaysia going cashless

In April, a survey by European payment company Adyen reported that over 30% of Singaporeans no longer carry cash with them, preferring mobile payment methods.

A Worldpay report also predicts that cash transactions in Singapore will decline from 2023’s 15% of point-of-sale (POS) transactions (S$23 billion) to just 7% (S$11.4 billion) by 2027.

While Worldpay noted that Singapore is leading in cashless transactions, with only 15% relying on cash compared to Malaysia’s 32%, The Star reported that Malaysia is also seeing a decline in cash transactions, with many opting for e-wallet use.

According to data from Bank Negara Malaysia, Malaysians made 3.65 billion transactions through e-money from January to September 2024, which includes e-wallets and mobile banking apps.

This made e-money the most widely used e-payment method, far ahead of debit and credit cards, which recorded 1.45 billion and 678.4 million transactions, respectively.

While e-wallets have seen a rise, cheques and charge cards are becoming less common. Over the past five years, the use of cheques and charge cards has been dropping steadily.

E-money allows users to load money onto a physical card or an app to make payments. The number of e-money users in Malaysia has been growing rapidly.

In 2019, there were only 78 million e-money users, but by last year, that number had risen to 169 million. As of September 2024, it reached 179.33 million.

Is going cashless a good thing?

Dr Yeah Kim Leng, economist and president of the Malaysian Economic Association, said this increase is a positive sign of Malaysia’s move towards a more digital economy.

He attributed the rise in e-wallet usage to the government’s efforts to push digitalisation and the financial sector’s push to reduce costs and improve services.

He added that the convenience, relative safety and security of digital-based financial servi...