Richard Whitfield
In January and December of 2016 I wrote a couple of articles about how Macau should be proactively going cashless. Unfortunately, not much seems to have happened since then, which is a pity. Macau is losing a great opportunity to lead the moves towards cashless societies in the region and to become a source of technical and other expertise for implementing such systems in other places.
Different countries are eliminating cash at different rates, and largely replacing it by swiping credit cards or tapping smartphone Apps. In Sweden the number of retail cash transactions per person has dropped by 80% in the last 10 years, and cash now accounts for just 6% of purchases in Norway. America is probably 10 years behind Scandinavia. Digital payments in China are catching up quick, accounting for only 4% of payments in 2012, but 34% of all payments in 2017.
However, friends in Hong Kong complain about the difficulties of smartphone payments there because they cannot handle multiple currencies and legal jurisdictions. Macau is even further behind, eg even high end food and beverage outlets cannot easily split bills between several credit cards and many smartphone payment systems do not work here. Also, “no brainer” cashless systems do not work here, eg the new ticketless carparks still require you to go to the Shroff office, tell them your car number plate and pay by cash or credit card – surely your car number plate could be linked to a credit card for automatic payment?
As well as direct cash payments there are also lots of electronic money transfers. For years I have been going online to easily transfer money between my bank accounts at different banks and to other people’s accounts to make payments in Australia, but this is still largely impossible in Macau. Online, I can also easily transfer money from my Australian bank accounts to my Macau bank account, but I have to go to my Macau bank branch and fill in a paper form to initiate a transfer from Macau to Australia.
In Australia, over many years the financial regulator and banks have invested in a reasonably modern inter-bank transfer system and there are even better systems in several other countries. For example, an electronic funds transfer system in America called TCH, which is owned and operated by 25 large banks there, transfers money between accounts at different banks almost instantaneously and charges the participating banks a flat fee of $US0.045/transaction to send money and nothing to receive money. This is much more reasonable than the percentage fees currently charged for many money transfers and credit card transactions. Unfortunately, the financial regulator and the banks in Macau do not seem to have invested in any such system here.
There are several major benefits driving the shift to cashless societies, including the desire for seamless integration with digital lives, the cost savings from eliminating cash handling infrastructure, reducing opportunities for theft and tax avoidance, and easy data collection and analysis of shopping habits. Many of these benefits will lead to big problems if the transition from cash is rushed and poorly managed. We need the Macau Monetary Authority to take a strong lead in this area to ensure that proper regulations to ensure data privacy and the security of electronic money are set up and that the transition to a cashless society is made gradually, fairly and inclusively. Unfortunately, at present, they seem to be doing nothing much.
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