Why are Selangor and Penang leading in digital payment adoption?

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Selangor and Penang Lead Digital Payment Adoption Due to Strong Government Cooperation and Support

Selangor and Penang have achieved a 90 per cent penetration rate of digital payments as of October, positioning them as leaders in Malaysia's cashless transition. This significant accomplishment is attributed to the concerted efforts and cooperation of their respective state governments' top management. By actively encouraging cashless transactions, these states aim to minimise financial leakages and enhance government revenue collection.
State Government's Role in Promoting Cashless Payments

The proactive stance of the top management in Selangor and Penang has been instrumental in driving the adoption of digital payments. Their commitment to promoting cashless methods signals a strategic approach to modernising financial operations. This top-down encouragement fosters an environment where digital transactions are prioritised and facilitated, leading to the high penetration rates observed.
Reducing Leakages and Increasing Revenue

A primary objective behind the push for digital payments in these states is to reduce financial leakages. Cash transactions can be more susceptible to errors, mismanagement, and potential loss, whereas digital payments offer greater transparency and traceability. By minimising these leakages, the governments can ensure that funds are accounted for more effectively, ultimately contributing to an increase in overall government revenue.
Broader National Campaign and Agency Experiences

The success in Selangor and Penang aligns with the national 'Cashless Boleh' campaign, which seeks to establish e-payment as the primary mode of transaction across Malaysia. Payment Network Malaysia Sdn Bhd (PayNet), the operator of DuitNow and JomPay, highlighted the experiences of various government agencies. For instance, the Immigration Department has maintained a 100 per cent cashless payment rate since December 2020, overcoming initial challenges through strong management support and a "forced voluntary" approach to eliminate cash transactions. The Ministry of Health has also seen a substantial increase in cashless transactions, from 426,000 in January 2023 to 1.2 million currently, despite facing challenges related to community acceptance, digital literacy, and infrastructure in certain areas.

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Why are Selangor and Penang leading in digital payment adoption?

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