Most likely, if a similar study is conducted in Malaysia, the results would show bigger savings here, given the greater digital connectivity we have today. Our efforts over the years have shown some encouraging developments. The aggregate data points that we are on the right track. The growth rate of cash in circulation (or better known as CIC) in Malaysia has been slowing down for three years in a row since 2015. Measured against GDP, CIC decreased albeit marginally for the first time last year since 2014. With high penetration of debit cards and mobile devices, Malaysia is well-positioned to transition into a cashless society in the medium term. To continue our collective effort to ensure widespread adoption of e-payments becomes a reality, my remarks today will touch on the following perspectives; future proofing the Malaysian payment infrastructure, embracing digital disruption that will redefine the payment mechanism as we know it, and some thoughts on public engagement and consumer protection. Future-proofing Malaysia’s payments infrastructure The use of big data will provide a competitive edge among payment service providers. Payment flows used to be an operational matter, but now have immense strategic value. It has to do with the enormous amount of data and information that the system collects on the payment habits of the public. With data analytics, these data can provide deep insights on consumer and merchant behaviour, and even the economy at large. With this information in hand, there is also the enormous responsibility to ensure that it is not being abused and mishandled.

With so many things competing for our attention these days, the design of customer experience is critical. Delivering a superior customer experience is a major source of competitive advantage. Intensifying public engagement and consumer protection Our migration to e-payments would not be successful without intense public engagement and consumer protection efforts. Firstly, much more needs to be done to promote debit card usage. The Bank has taken the lead by lowering the costs of debit card acceptance through the Payment Card Reform Framework (PCRF) in 2015. Consequently, Malaysia’s debit card interchange fee rates are now among the lowest. They are up to 10 times lower than the rates in other regional economies. The industry should take advantage of this. We need to educate merchants on the availability of a lower cost debit card network. To move this forward, PayNet will drive an industry wide awareness campaign. Merchants who cannot afford the cost of accepting the more expensive 4/5  BIS central bankers' speeches  credit card should opt to accept only debit cards. This would lessen the incentives for merchants to impose surcharges to recover their payment card acceptance cost which would ultimately benefit the consumer. Secondly, good customer engagement through effective disclosures can be a source of competitive advantage. Payment providers should consider differentiating themselves by disclosing key security features and safeguards against fraud and malware threats. This would demonstrate how the customer’s hard earned money and sensitive personal data are being protected.