KUALA LUMPUR, Dec 10 — Malaysia recorded a high usage of cheques and cash despite efforts by Bank Negara to encourage the use of electronic payment (e-payment).

Malaysia’s usage of cheques per capita is at 6.9 compared to 0.2 in countries like Norway, Sweden, Denmark and Finland.

Bank Negara deputy governor Datuk Muhammad Ibrahim said yesterday: “Likewise, the ringgit currency in circulation over gross domestic product of 6.1 per cent is much higher than the 3.8 per cent average in these countries.”

Although there had been significant improvement in the cheque-processing infrastructure, it remained an expensive payment instrument to process, he said.

The current rate is about RM3 a cheque.

“It is estimated that cheque processing costs Malaysia RM768 million a year. This amount is huge and a sheer wastage,” he said in justifying Bank Negara’s decision to increase the cheque processing fee by 50 sen per cheque leaf from April 1 next year.

Muhammad said Malaysia was at a turning point in the migration to e-payment especially with the RM1.8 billion allocation under Budget 2014 for the implementation of the second phase of the high-speed broadband project.

Calling on companies to switch to e-payment, he said the central bank had called on banks to widen access points for the public to conduct e-payment, including via ATM networks.

“While Malaysia’s population stands at 29.7 million, there are 41 million ATM cards with debit application that can be used to make purchases at merchant outlets,” he said.

“This provides an opportunity for banks and businesses to leverage on and reduce the need for cash as well as increase tourist spending at more merchant outlets.”

He noted that an efficient, reliable and secure payment system was critical to the stability of a country’s financial system, besides enhancing its economic growth and competitive position.

To nudge the systematic migration to electronic payments, Bank Negara had set targets in the Financial Sector Blueprint to reduce the number of cheques processed yearly by half to 100 million in 2020 from 204 million in 2012, he said.