Selangor, Penang lead Malaysia in cashless transactions

by HIDAYATH HISHAM

MALAYSIA is aiming to achieve 95% cashless adoption nationwide by 2025 under a partnership between the Finance Ministry (MoF) and Payments Network Malaysia (PayNet), the country’s retail payments infrastructure provider.

Selangor and Penang have already achieved over 90% adoption of cashless payments at government agencies, according to PayNet Government Digitalisation senior director Firdaus Ghani.

Selangor’s mentri besar and Penang’s chief minister have been pushing for cashless payments in their respective states.

The high adoption rates were driven by strong top-down leadership, as well as local champions within the state governments.

“To achieve the goal, we require two key elements: First, enforced willingness, and second, the presence of local champions, as engagement is crucial,” Firdaus told The Malaysian Reserve (TMR) at the “Cashless Boleh 3.0” campaign prize-giving ceremony at MoF today.

Similarly, Penang’s small size allowed coordinated efforts under the chief minister’s leadership.

Other states are catching up, with Perlis at 60%, Kedah 80%, Johor over 50% and Perak around 49%, based on latest figures.

Digital payment penetration in the public sector has surpassed 80%, marking a 22% increase since 2021 at both federal and state levels. Perlis and Kedah have also crossed the 80% mark.

Several previously cash-heavy agencies like the National Higher Education Fund Corp (PTPTN) and the Immigration Department have now reached 100% digital adoption.

At the event, MoF Deputy Secretary-General Datin Rashidah Mohd Sies welcomed collaborations that drive efficiencies and transparency through digitalisation.

“The government continues to focus on driving efficiencies and transparency within the public sector.

“Public-private sector collaborations to advance the nation’s cashless agenda such as these are welcomed since they contributes directly to the goal,” she said.

Meanwhile, PayNet CEO Farhan Ahmad said the company’s role is essential for facilitating Malaysia’s digital economy journey.

“Harnessing digital payments benefits from increased public trust and an open economy.

“With the current public sector’s digital payments adoption rate at over 80%, both the public and the government are already experiencing these amazing benefits from the efficiencies gained,” he said.