Cyberjaya is first Malaysian city to adopt national QR code for cashless payments

• Nine banks already offer DuitNow QR, with 23 banks and four e-wallets to follow
• Lim Guan Eng: RM66 million already disbursed as part of e-Tunai Rakyat

THE city of Cyberjaya has now become the first Malaysian city to adopt a national QR code for cashless payments. The initiative is part of a collaboration between MOF Inc’s (a body corporate under Malaysia’s Ministry of Finance) Cyberview Sdn Bhd and the Central Bank’s affiliate Payments Network Malaysia Sdn Bhd (PayNet).

“Through this initiative, Cyberjaya will be the first city in Malaysia to adopt a national QR code under Bank Negara Malaysia’s Interoperable Credit Transfer Framework (ICTF). Cyberview will spearhead this with our partner, PayNet, to encourage more businesses to adopt cashless solutions and further ease payment transactions for communities in Cyberjaya,” says Cyberview Sdn Bhd managing director Najib Ibrahim.

A national QR code has been in the making as part of the ICTF, which mandates PayNet – as the country’s shared payment infrastructure provider – to implement an interoperable and common QR standard for Malaysia.

According to PayNet chief executive officer Peter Schiesser, the proliferation of e-wallets and QR codes – while a boon to the digital economy – may confuse and overwhelm consumers and merchants, who have to deal with multiple QR codes and different e-wallet providers at the same time.

A common national QR code, called DuitNow QR, will allow users to make payments from any participating bank or e-wallet mobile app, while merchants would only need to display one QR code to accept payments.

“The DuitNow National QR standard established under Bank Negara Malaysia’s ICTF enables a merchant to sign up with one Acquirer which will then eventually enable 22 million bank customers and millions of e-Wallet customers to make payments,” says Schiesser.

Nine banks are already offering DuitNow QR in their mobile banking apps, with 23 banks and four major e-wallets expected to implement DuitNow QR over the next six months.

Part of a cashless journey

Making Cyberjaya as the launch pad of a national QR code is part of the city’s own cashless journey. Malaysia’s Minister of Finance Lim Guan Eng, who was present to launch the DuitNow QR, notes that Cyberjaya’s plan to go cashless started in 2018 with an objective to secure more than 80% merchants to accept at least one e-payment mode, which can either be credit or debit cards, or e-wallets.

“Apart from shops, Cyberjaya Farmers Market and Pasar Malam sellers are also targeted so that they will be digitally enabled to accept e-payments and thereby, inclusivity,” he says.

Najib Ibrahim says that, as of December 2018, 51% of merchants in the tech-centric city are cashless enabled.

“We foresee further growth in adoption with the implementation of DuitNow QR.”

DuitNow QR’s implementation in Cyberjaya follows the recent e-Tunai Rakyat initiative, a US$110,834,730 (RM450 million) incentive wherein eligible Malaysians aged 18 and above will receive RM30 in one of three e-wallet providers from the government for the period between Jan 15, 2020 to March 14, 2020.

[US$1 = RM4.06]

Lim says that the initiative has seen “encouraging response” from Malaysian citizens, and as of 9pm of Jan 19, there has been a total of 2.9 million applications, with 2.2 million approvals. A total of RM66 million has already been disbursed thus far.

E-wallets and electronic payments in Malaysia could do with the boost. According to Lim, despite the efforts and initiatives in the past two decades, only 5% of total daily payments in Malaysia is cashless.

Lim notes that going cashless is a government priority as one of the means to curb corruption. Cashless transactions are digitally recorded, thus leaving little to no room to accept or give bribes.

“Electronic payments are also an important and secure means to ensure that the correct parties receive our targeted subsidies without any unnecessary handling fees or commissions. Another important benefit of going cashless is to improve tax collections so that public infrastructure can be further improved,” he says, adding that the United Nation estimates US$2 trillion a year is wasted on corruption.

In closing, Lim says that PayNet is working with various government departments and agencies at state and federal levels to enable the government to go cashless. “There will also be initiatives throughout the year to encourage cashless payments and change customer behaviour.”