The rise of e-wallets in Asean

 

QR-based payment systems are now widely used and integrated across Asean, with each country adopting its own system.

E-WALLETS have been around for more than 25 years, ever since Coca-Cola introduced its SMS-based vending machine payments in 1997 and emergence of PayPal in 1998.

In Malaysia, cash was king, until the unthinkable happened—a pandemic that stopped the world in its tracks for two years. Within that timeframe, Covid-19 caused not only a major shift in how people lived but their attitudes as well.

According to a survey done by PwC Malaysia in September 2021, during the Covid-19 pandemic lockdown, it charted that the average transactional frequency done on e-wallets almost doubled as compared to May 2018, with weekly transaction values increasing more than three-fold.

In fact, the Visa Consumer Payment Attitudes Study 2024 showed a surge in e-wallet adoption across the region in 4Q2023, with 79% of respondents reporting they use this payment method, outpacing cash (77%), debit and credit cards (70%) and Internet banking (70%).

Furthermore, the region’s digital economy made good progress last year. The 2024 e-Conomy SEA report showed a 15% increase year-on-year (YoY) of US$263bil for gross merchandise value, a revenue of US$89bil—a 14% increase YoY, and profits of up to US$11bil—a 24% increase year YoY.

However, even with such glowing reports, there is still the disconnect between the high digital transactions and still trails behind the more developed international countries when it comes to providing basic financial services.

An article in Asian Banking & Finance stated that in countries, such as the Philippines, Vietnam and Indonesia, more than half of their population were still unbanked or underbanked.

Even so, a Bain & Co report remained positive that those who are underbanked are the target market. Although they do not have full access to traditional financial services, their predilection for technology, as shown with the high smartphone penetration within the region, could be the answer.

Technology enabled business models would most likely bethe best way to serve this segment, which creates new market opportunities. The report stated that this segment is the biggest potential and the true growth engine in digital financial services.

Consumer tech platforms are ideally positioned to capture a larger share of the underbanked segment due to their extensive, growing, and engaged customer base. These platforms can enhance customer lifetime value by offering a more comprehensive range of consumer services.

But the potential of these transactions need not be confined within the countries they operate in. Thanks to the Regional Payment Connectivity (RCP), which was initiated by the central banks of Indonesia, Malaysia, Philippines, Singapore and Thailand in 2022, cross-border transactions allow payments to be made in local currencies. It also cuts down the costs and time of performing that transaction in the conventional way.

This solves the long-standing problem of having to rely on multiple banking intermediaries and the use of the US dollar. It also makes the transaction more affordable as it skips intermediary fees and long processing times to clear the payments. It also bypasses the regulatory differences that would have hampered the development of a unified payment system and the limited interoperability between different banking systems.

According to a Juniper Research report, such connections allow e-wallet transactions for cross-border payments, with tourism and remittances being the major consumer drivers. From a business standpoint, the benefits of instant payments are less apparent. The report noted that challenges still persist, which include fluctuating exchange rates and regulatory discrepancies between jurisdictions.

In a blog post, ASEAN+3 Macroeconomic Research Office mentioned the rising importance of using Quick Response (QR) payments. Popular during the pandemic, this form of payment gained widespread appeal, even over the near field communication (NFC) system and has integrated into the systems of participating central banks to standardise national payment systems.

Asean countries that have embedded this form including Cambodia’s KHQR, Indonesia’s QRIS, Lao PDR’s Lao QR, Malaysia’s DuitNow, the Philippines’s QR Ph, Singapore’s PayNow, Thailand’s PromptPay and Vietnam’s VietQR. Even Japan is reported to consider integrating its QR payment system into RPC, with full implementation by the end of 2025.

Locally, Bank Negara Malaysia (BNM) launched the Interoperable Credit Transfer Framework in 2019, which allows significant progress in the nation’s efforts to migrate to e-payments and reduce the usage of cash.

The framework establishes a shared payment infrastructure that connects bank and non-bank accounts while managing the resultant risks.

As Tan Sri Dr Zeti Aziz said in her keynote address during the Eminent Persons’ Dialogue, entitled Asean Financial Integration in a Multipolar World on Apr 9, more than 20 years ago, the pivotal decision was made for Asean economies to come together and pursue regional financial integration.

She said the drive for enhanced regional financial integration was aimed at enabling the efficient channeling of funds within the region for reinvestment. It was anticipated that this would lead to more stable financial flows, helping to counteract destabilising financial movements.

“Being high savings economies, it would also facilitate some part of our domestic savings to be reinvested in the region. Additionally, it would also support the development of domestic financial markets, enhance the overall resilience of regional financial systems and contribute towards the financing of growth and development in the region,” she said.

The Asean region may not be ready for a single unified currency like the European Union, but the economic interdependence between each state can be realised with the cross-border transactions afforded by linked e-payment systems

Malaysia PM announces cash handout for all adult citizen, Govt offering much-needed relief measures to ease living cost of rakyat

 

 

KUALA LUMPUR — Malaysia’s Prime Minister (PM) Anwar Ibrahim on Wednesday announced new measures to address growing public disquiet about the rising cost of living, including a cash handout for all adult citizens and a promise to lower fuel prices.

The announcement came ahead of a planned protest to be held in Malaysia’s capital Kuala Lumpur on Saturday, calling for Anwar to step down over escalating prices and a failure to deliver on promised reforms, among other concerns.

Anwar’s administration has carried out a number of measures to boost revenue and productivity this year, including a minimum wage hike, increased electricity tariffs on heavy power users, and new sales taxes on some imported fruits and luxury goods.

Anwar has said the moves were mainly targeted at large businesses and the wealthy, but critics have voiced fears that higher costs would eventually be passed down to consumers, including lower and middle income earners.

On Wednesday, Anwar said all adult Malaysians above 18 years old will receive a 100 ringgit ($23.67) one-off cash aid to be disbursed from Aug. 31.

The government will spend a total 15 billion ringgit ($3.55 billion) in cash aid in 2025, up from 13 billion ringgit originally allocated for the year, he said.

Police have said they expect between 10,000 and 15,000 people to attend the Saturday protest, which has been organized by opposition parties.

“I acknowledge the complaints and accept that the cost of living remains a challenge that must be addressed, even though we have announced various measures thus far,” Anwar said.

He added that further initiatives to aid those in poverty will be launched on Thursday.

Anwar said the government will also announce details on a long-awaited plan to remove blanket subsidies on the widely used RON95 transport fuel before the end of September.

Once the subsidy changes are implemented, Malaysians will see fuel prices at the pump drop to 1.99 ringgit per liter, compared to the current price of 2.05 ringgit, Anwar said.

Foreign nationals however will have to pay unsubsidized market prices for the fuel, he added.

Anwar also announced additional allocations for a government program aimed at increasing access to affordable goods and necessities, and vowed to improve other existing aid measures.

Malaysia has seen inflation fall this year, but worries persist over increasing prices of basic necessities like food.

Data released this week showed consumer prices rising 1.1% from a year earlier last month, but the costs of food and beverages were up at a faster pace of 2.1%.

Govt offering much-needed relief measures to ease living cost of rakyat

PETALING JAYA: Malaysians can look forward to a series of measures aimed at easing cost of living, including a one-off RM100 cash aid for those 18 years and above, and cheaper RON95 soon.

The cash assistance will be credited directly into their MyKad under the Sumbangan Asas Rahmah (Sara) initiative.

Prime Minister Datuk Seri Anwar Ibrahim announced these measures in a special announcement aired live on his social media platforms yesterday.

Offered in conjunction with National Day on Aug 31, he said the incentives were aimed at easing the rising cost of living and a token of appreciation for the people.

“With this announcement, the combined allocation for Sumbangan Tunai Rahmah (STR) and Sara rises from RM13bil to RM15bil this year, marking the first time in history that cash aid is extended to all adult Malaysians,” he said.

Anwar, who is also Finance Minister, said this initiative would benefit 22 million Malaysians with an allocation of RM2bil.

This assistance, said Anwar, can be used from Aug 31 to Dec 31 this year, to buy essentials at over 4,100 outlets nationwide, including major supermarkets such as Mydin, Lotus’s, Econsave, 99Speedmart and participating grocers.

“It will be distributed on individual basis, not by household. So, for example, a household with a husband, wife and two adult children will receive a total of RM400,” he said.

Less is more: The price of RON95 petrol will soon be reduced to RM1.99 per litre under a targeted subsidy scheme with further details to be announced by the end of September. — IZZRAFIQ ALIAS/The Star

Anwar said the cost of living remained a pressing challenge that must be addressed wisely and urgently.

He added that while overall inflation in June 2025 dropped to 1.1%, the lowest in 52 months, food and beverage prices continued to rise above the national average.

“There may be some among us who are financially secure and do not need this aid. The government intends to reallocate any unspent funds by year-end towards assistance programmes for vulnerable groups next year,” he added.

In a separate statement, the Finance Ministry said collectively, households have the potential to receive a higher amount of Sara credit.

“For example, a family comprising a husband, wife, and two children aged 18 and above would receive a total of RM400, instead of just RM100,” it said.

The Sara credit can be used to buy over 90,000 essential items across 14 categories, including rice, egg, household cleaning products, medicine and school supplies.

“The RM100 credit is valid until its expiry date of Dec 31, 2025.

“Any unspent balance will be redistributed to vulnerable groups through a programme to be determined later,” said the ministry.

Sara complemented the Sumbangan Tunai Rahmah (STR) initiative, which provided monthly credits specifically for purchasing basic necessities, it added.

The initiative was introduced by the government in its first Madani Budget in 2023 and currently benefits 5.4 million active recipients.

“Both initiatives are a token of appreciation from the government to all Malaysians who continue to support the nation’s fiscal reform agenda.

“They also reflect the Madani government’s commitment to redistributing the nation’s growing wealth, a result of bold fiscal reforms and more efficient economic management, guided by the Madani Economic Framework.

Anwar also highlighted that the Jualan Rahmah Madani initiative will be enhanced to assist the public in managing living costs.

The government, he added, will double the initiative’s allocation from RM300mil to RM600mil.

This funding will increase the frequency and expand the Jualan Rahmah Madani to include all 600 state constituencies nationwide, said Anwar, who is also Finance Minister.

“The additional allocation will, among others, increase the frequency and expand the number of locations nationwide, covering all 600 state constituencies,” he said.

Anwar also said the price of RON95 petrol will soon be reduced to RM1.99 per litre under a targeted subsidy scheme with further details to be announced by the end of September.

The government, he said, was committed to optimising national subsidy spending by ensuring that ordinary Malaysians continued to benefit from subsidies, while curbing leakage to those not eligible.

“Once the targeted RON95 subsidy is implemented, the government will reduce the price of RON95 petrol to RM1.99 per litre exclusively for Malaysian citizens, while foreign nationals will have to pay the unsubsidised market price.”

The initiative, he said, would benefit about 18 million motorists, including youths as young as 16 and gig economy workers.

“In 2023 and 2024 alone, subsidies for RON95 were estimated to cost nearly RM20bil annually.

“Even this year, despite a drop in global oil prices, the unsubsidised price of RON95 remains around RM2.50 per litre, significantly higher than the subsidised rate Malaysians currently enjoy,” he said.

He explained that the move aims to ensure that ordinary citizens continued receiving fuel subsidy while leakage to ineligible groups, including foreigners, are addressed.

To address the critical need for doctors in hospitals and government healthcare facilities, Anwar also announced that over 4,000 positions for government doctors, including contract medical officers, would be available this year.

He confirmed that 4,352 new doctors, including those on contract, would be hired this year.

According to projections released in 2023 by Dr Hirman Ismail, deputy director of the Health Ministry’s medical development division, the public healthcare sector would require 63,040 doctors by 2025 and 79,931 by 2030.

As of last year, there were nearly 52,000 doctors employed in government service.

Related stories:

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• Sim: Comply with ruling
• ‘Toll hike delay eases burden on daily commuters’
• Easing the people’s burden for a stronger economy
• Let people decide if they want the RM100 aid, says Dr Wee
• Some think Sabah has too many holidays

BE LABEL-SAVVY TO STAY HEALTHY for organic food among health-conscious consumers

 

PETALING JAYA: The multi-billion-­ringgit global organic food and beverage market is expected to grow more by 2030, according to market research firm Grand View Research.

For Malaysia, there is a growing appetite for organic food among health-conscious consumers.

CLICK TO ENLARGE

But how do people know whether the “organic” foodstuff they buy are truly organic?

An important source is the myOrganic sticker that is usually found on the packaging of organic foodstuff sold at shops.

The myOrganic certification scheme is used to promote, implement and facilitate the adoption of organic agriculture, explains Agriculture Department (DOA) director-general Datuk Nor Sam Alwi.

“This certification scheme covers various organic activities, including fresh produce farming, beekeeping, the breeding of organic plant varieties and wild harvesting.

ALSO READ: Verifying food markers not quite an organic process

“The Malaysian Organic Certification Scheme is now known as myOrganic,” she said in in a statement to The Star.

To safeguard the authenticity of certified organic products, the regulation of organic items is primarily governed under the Food Act 1983 and Food Regulations 1985, overseen by the Health Ministry, she added.

The Agriculture and Food Security Ministry has also registered the myOrganic certification logo with the Intellectual Property Corporation of Malaysia (MyIPO) as a legitimate trademark.

“If the DOA receives complaints about the misuse of this logo, the matter will be referred to the Domestic Trade and Cost of Living Ministry for further investigation.

“In cases where fraud is confirmed, the offending company may be prosecuted under the Trademarks Act 2019,” she said.

Upon conviction, offenders may face a fine of up to RM10,000 per item bearing the misused trademark, imprisonment of up to three years or both.

ALSO READ: How bugs help you spot organic durians

Nor Sam said the department has issued guidelines to certificate holders outlining the terms and conditions for the use of the myOrganic logo.

“However, we also rely on the cooperation of consumers to address the risks of fraud and logo misuse by lodging complaints where appropriate.

“Matters related to processing, repackaging or importation of organic products fall strictly under the jurisdiction of the Health Ministry,” she said.

To create awareness, the department is actively carrying out promotional activities targeting consumers through physical events and social media platforms, as well as by engaging with local organic associations.

“These initiatives focus on promoting Good Agricultural Prac­tices (GAP), highlighting the importance of recognising the myOrganic logo, encouraging the purchase of certified farm produce.

“Additionally, consumers can verify the validity of organic certification by visiting the DOA website at www.doa.gov.my under the list of certified recipients,” she said.

Dr Juju Nakasha Jaafar, senior lecturer at the Faculty of Agri­culture at Universiti Putra Malay­sia, said there has been confusion on the authenticity of organic products.

“For example, a seller might claim he is selling pesticide-free or chemical-free vegetables, which gives consumers the impression that the products are organic.

“In reality, these vegetables may be free from chemical pesticides but are still grown using chemical fertilisers and thus do not qualify as organic,” she said.

“For vegetables to be certified as organic, all input must be completely natural.

“This includes compost fertilisers, organic pesticides and non-genetically modified organism seeds.”

These are outlined in the myOrganic certification guidelines.

“Consumers can look for the myOrganic logo on vegetable products to ensure they are truly organic.

“The DOA strictly regulates this certification,” she said, adding that more details can be found on the DOA website.

Federation of Malaysian Consumers Associations (Fomca) secretary-general Dr Saravanan Thambirajah said traders must verify the certification documents provided by suppliers before selling or labelling any product as organic.

“They should only use the term ‘organic’ when backed by certification,” he said.

Saravanan said consumers should look for official certification logos on packaging and not rely solely on general claims like ‘natural’.

“If you suspect a product is being falsely marketed as organic, you should report it to the Domestic Trade and Cost of Living Ministry or lodge a complaint with Fomca,” he added.--

By KHOO GEK SAN, DIVYA THERESA RAVI and RAGANANTHINI VETHASALAM

https://www.thestar.com.my/news/nation/2025/07/12/be-label-savvy-to-stay-healthy

Govt urged to intervene as new US tariff brings jitters for businesses

 

Trying times: The tariff would significantly impact manufactures like those in Bayan Lepas, Penang. — CHAN BOON KAI/The Star

JOHOR BARU: The 25% tariff imposed by the United States on Malaysia has sent jitters through the manufacturing sector, with many warning of cancelled orders and a potential wave of business closures.

The furniture industry, for one, fears losing business to Vietnam, which faces a 20% tariff, while some other industries are even thinking of relocating.

Malaysian Furniture Council president Desmond Tan said Vietnam, Malaysia’s closest competitor in the global furniture market, produced a similar range of products and targets the same export destinations – especially the United States.

The tariff for Vietnam was reduced to 20% from the original 46%.

“Since the announcement was only made yesterday (Tuesday), it is still too early to gauge the full extent of its impact on order volumes but the council will continue to monitor developments closely,” he said.

Tan said the industry was also being squeezed by rising costs on the domestic front.

“These include the expanded Sales and Service Tax (SST), which now imposes a 5% tax on raw materials and directly drives up production costs. We also face higher labour expenses with the new minimum wage,” he added.

The new Employees Provident Fund contributions for foreign workers would add further strain while fuel and electricity prices had also gone up, he said.

The council is now urging Putrajaya to commence urgent talks with the United States to negotiate a reduction of the tariff.

He also appealed for a rethink on the new taxes and price hikes to lower production costs, and for export incentives to protect jobs.

The United States accounts for 60% of the country’s total furniture exports, totalling RM2.039bil in just the first four months of the year.

Malaysia also exports furniture to Singapore, Australia, Japan and the United Kingdom, among others.

Muar Furniture Association president Steve Ong said the new tariff was a major blow, as Muar supplied more than RM4bil worth of furniture to the United States in 2024.

It made up 67% of Malaysia’s total furniture exports there, he said.

“The 25% tariff will likely lead to clients cancelling orders and local manufacturers scrambling to stay afloat. This is an urgent crisis,” Ong said.

Another industry player urged the government to act swiftly.

“If nothing is done, a globally competitive industry like ours could shrink or even collapse,” said Goh Song Huang.

“At a time like this, we need clear, steady policies and a government that understands and responds to the real pressures we face.”

In Penang, local industries are bracing for reduced demand with some considering relocation.

“Companies in Malaysia may be forced to shift parts of their production to countries with lower tariffs,” said Malaysia Semiconductor Industry Association (MSIA) president Datuk Seri Wong Siew Hai, adding that higher prices driven by import tariffs tend to suppress global demand.

“When the cost of imported goods rises, demand naturally falls. In the end, everyone along the supply chain, especially buyers of raw materials, will be affected,” he said.

Earlier, it was reported that semiconductor exports would be exempt from the tariffs but it is unclear whether exemptions will remain under the new tariff regime.

“Vietnam’s tariff is at 20%, which gives them a pricing advantage. US buyers may look for cheaper alternatives, putting Malaysian exporters at a disadvantage,” he said.

Federation of Malaysian Manufacturing (FMM) Penang chapter chairman Datuk Seri Lee Teong Li said the 25% tariff would significantly impact exporters to the US.

“It’s a substantial amount. For local manufacturers shipping to the US, it will reduce profit margins. Costs will rise, and customers may start sourcing from other suppliers.

“Even when the 24% tariff was announced in April, it was already a heavy blow. We had hoped for a reduction, not an increase,” he said.

He noted that for now, the strategy was to ship out as much as possible before the Aug 1 deadline.

Meanwhile, the Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM) is urging the government to temporarily lower the expanded SST to 4% to ease the financial burden on businesses and preserve Malaysia’s competitive edge.

Its president Datuk Ng Yih Pyng said the government should reduce the expanded SST rate from the current 6%-8% for the first two years of implementation.

He said businesses, already grappling with higher operational costs driven by multiple government-imposed measures, would now have to face the the tariff headwinds and global uncertainties as well.

Source link https://www.thestar.com.my/news/nation/2025/07/10/govt-urged-to-intervene-as-new-us-tariff-brings-jitters-for-businesses