Making cashless payments has not only become a new safety protocol for merchants during the pandemic but also a convenient practice that is here to stay as more consumers make the switch. This is also a growing case for change for Government bodies who can use this opportunity to realise key nation building initiatives such as improving digital literacy and providing convenient digital services to the public.
These nation building initiatives have become a major focus for many countries in the region, as e-commerce sales in Southeast Asia reached US$62 billion (RM260 billion) in 2020 and is predicted to increase by US$100 billion within the next four years1. These ASEAN countries are now building their foundations to become digital giants, as seen with Vietnam which is emerging as one of the best data centre markets in the world2.
As these new digital technologies are seen as essential for economic growth and recovery, increasing cashless payments can generate the Malaysian economy annual savings of up to 1% in gross domestic product (GDP). Transparency and bookkeeping will be more efficient as well, as most under-declared service taxes involve petty cash transactions.
More importantly, cashless payments can help governments drive financial inclusivity for the un-served, underserved, and unbanked. For example, the unbanked segment, such as migrant workers or the hardcore poor who do not have access to banking services, will be able to enjoy internet purchases through cashless payments via prepaid cards.
As for the unserved and underserved community with low spending power, such as the low income B40 segment, this is an opportunity for groups and authorities to efficiently reach out to them with cash-less financial aid. Secure cashless payments generally meet today’s customers’ demands of speed, security and convenience, as it was seen that almost seven in ten Malaysians (69%) preferred to use various forms of cashless payments last year3.
The Malaysian government today is already working on providing ultimate convenience through cashless vendors – one of which is Green Packet’s subsidiary company, Kiplepay (Kiple). Kiple offers enterprise solutions for state and agencies to go cashless via white labelled e-wallets to eKYC, payment gateways and Visa card solutions. With a variety of functionalities, Kiple enables state and government agencies to manage and utilise their e-wallets efficiently and ultimately support an increasingly cash-less, tech-powered society. This can be seen with the latest Kiple Visa Prepaid Card partnership, which aims to enable customers to go cashless while also facilitating enterprises to fast-track their e-payment solutions. As the solution is built with Kiple’s Wallet as a Service (WaaS) ecosystem, the government can take advantage of Kiple’s Loyalty Plug & Play model and access to Visa’s network of 70 million merchants in over 200 countries and territories. Visa’s wide merchant acceptance helps greatly to do away with merchant acquisition costs.
Kiple has long been supporting government bodies with their digitalisation transformation journey through various partnerships. These include collaborating with SELANGKAH to create mobile application and digital solution SELANGKAH BIZ to help micro SMEs accept digital payments; partnering Digital Perak to consolidate its states digital services & payments for Perakians; the e-commerce platform, WarongKu to encourage cashless transactions, and working with Malaysian Industrial Development Finance Bhd (MIDF) to provide financing solutions to SMEs looking to digitalise their businesses. With more consumers embracing cashless payments, Kiple is driven to support the underserved segment and will be looking towards more government partners to further encourage digital payments.
Efficient and Automated Financial Aid Disbursement
To encourage the B40 communities to participate within the digital economy, the government can demonstrate the benefits of going cashless through the usage of prepaid cards. Financial aid programmes with funds disbursed through prepaid cards have several benefits over simply giving handouts in hard cash.
Government will be able to control fund disbursement into the prepaid cards at regular intervals and limit where and how these cards are spent. This comes in handy as it can be dictated that the cards only be spent at micro-merchants and local clinics, ensuring that money flows back into the local community.
With the pre-loaded prepaid cards, users of the financial aid can perform contactless and cashless payments to purchase necessities for child support, receive food stamps, veteran benefits, pensions, social security payments, and more.
State & Government Enabled E-Wallets for Ultimate Convenience
Gone are the days of cumbersome trips to official government agency offices, long waiting lines, or tedious online registrations just to make payments or requests for fund disbursements. Government agencies are now able to integrate services within e-wallet apps to support services and payments to provide the same convenient services to the public without the hassle.
For example, things like asset bookings, payments of quit rents, traffic or parking summonses, license applications, and more can be carried out via an e-wallet app. This effectively reduces foot traffic to these offices and gives the public a convenient option of carrying out their civic duties from home.
Cashless cards will be able to receive fund disbursements as well, such as education funds, EPF and SOCSO payments, and more.
Government & Corporate Benefits Cards
Public benefits aside, the government can also adopt the prepaid cashless card model to provide corporate benefits to its employees. By implementing this model, a significant portion of the spend-first claim-later system can largely be abolished.
With that system gone, the heavy burden of tracking claimable payments and providing reimbursements can be lightened significantly.
These are some of the ways that Green Packet’s Kiplepay, together with Visa, looks to work towards and strengthen. Regardless of whether cashless cards are to benefit the public or the government, the positive effects are undoubtedly there, and this is how we can push the digital nation forward even further.
To learn more about Kiple Visa Prepaid Card, visit kiple.com/enterprises
Source: CEO Morning Brief