Embrace e-wallet payments, DuitNow for faster disbursements, SMEs told
Published on: Thursday, February 01, 2024
By:
Lynelle Tham, FMT
Small and Medium Enterprises Association chairman William Ng said reduced disbursement time will enhance sales and cash flow.
PETALING JAYA: A business group has urged small and medium enterprises (SMEs) to accept e-wallet payments and utilise services like DuitNow to cut down disbursement time and enhance sales and cash flow.
The Small and Medium Enterprises Association (Samenta) said banks generally settle payments to merchants within 48 hours.
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Commenting on the recent call by MCA president Wee Ka Siong for banks to complete payment processing within this timeframe, Samenta chairman William Ng said that although “not critical”, the issue raised was nonetheless important.
“Samenta has been working with banks to encourage as many SMEs as possible to use QR Pay and to accept e-wallet payments.
“This reduces the disbursement delay caused, among others, by the acquiring banks’ agreement with the payment card providers.”
Ng said although it would be preferable for SMEs to make payments via credit card to receive real-time payments, this might not always be feasible due to concerns of potential card fraud and transactions involving foreign-issued credit cards.
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He also pointed to a larger issue for SMEs: the high commission rates, known as the merchant discount rate (MDR), charged by acquiring banks to retailers.
“Some large chain stores and petrol stations are charged as low as 0.25% MDR while SMEs are typically charged 1.5 to 5%,” he told FMT.
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“It is time for Bank Negara Malaysia to step in and do another study along with the banks to see how these rates can be brought down to a minimum, given the prevalence of e-wallet payment.”
Last Friday, Wee said banks should settle payments to merchants within 48 hours to enhance cash flow for merchants and improve the economy’s “velocity of money”.
He also said banks should no longer cite public holidays and weekends as grounds for delaying payments to merchants, especially with the increasing adoption of e-payments and IT automation.
“After all, banks do not stop charging interest on loans during public holidays and weekends, so why should they benefit from the free float when they delay payments to merchants?” he said.
SME Association of Malaysia secretary-general Chin Chee Seong agreed that any payment delay, especially during public holidays, was unacceptable.
“Strictly speaking, for smaller retailers and SMEs, one to two days won’t really matter, but if you’re talking about bigger transactions, a bigger turnover per day kind of transaction, then it would definitely affect cash flow,” he said, adding that this would then affect payment to suppliers.
Chin also spoke of a need to help smaller merchants, even if these merchants are only dealing with smaller amounts.
“I don’t think the bank needs to make money (by holding the funds). It is important that there is speed,” he said.
FMT has reached out to the Association of Banks in Malaysia for comment.
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