Saturday, January 06, 2007

Cashless society - all plastics

While doing my 2004 summer internship in Jacksonville, Florida, my colleague shared her passion and belief about cashless society: all monetary transactions should be done with "plastic".

My experience of not carrying cash in the U.S. was good. Most shops and services accept credit cards, brick-and-mortar as well as online. Colleges and universities also promote this idea by consolidating everything into the student cards. Getting a credit card is also easy, for good and bad.

Experience in Asia, especially in Malaysia and Indonesia, however, hasn't been that good. Many shops still don't accept credit card - mostly the traditional shops and services, which are a lot in these countries. Even some big stores - electronics, watches, etc. - charge the interchange (or merchant service) fee, about 2-3% to customers.

Credit card thefts, or frauds, also seem to be more frequent in these two countries. Although I have no data, I have more friends worrying about using their credit cards or doing online transactions here in Malaysia and Indonesia. Perhaps it's the not-yet-matured infrastructure that gives more rooms for crimes.

I once was a victim of credit card fraud in the U.S. But my experience dealing with the bank to cancel the transaction was so much easier than dealing with renewing my credit card here in Malaysia. It could be the bank, but definitely it's the customer service problem in Asia.

It seems to me that the main 'challenge' to cashless society in Indonesia or Malaysia is culture. Business owners still prefer cash, hard cash. Though true, cash is king, I'd still assume that accepting credit cards brings other benefits. Despite the charges and risk of fraud, a merchant should be entitled to these benefits: potential sales increase, cash security (by not storing much cash in the store), financial management, etc.

I ain't working for bank nor am I an employee of Visa, MasterCard, Amex, etc. I just don't like to have a thick wallet. I'm a supporter of cashless society.