Cashless Payments Offer More Than QR Codes

Malaysia’s shift toward a cashless society has been steady since the Covid-19 pandemic. Today, QR code payments are standard at major retailers and hawker stalls alike. While digital acceptance is now common, many micro, small and medium enterprises (MSMEs) are not fully using the data generated by these transactions. This information could help them compete in a digital economy, but many businesses only view the technology as a payment method rather than a business tool.

Paydibs Sdn Bhd CEO Tee Kean Kang says businesses must move beyond simply displaying a QR code to see the full value of cashless payments. A QR display puts a merchant at the acceptance level, but it does not utilise the benefits of the system on an operational level. Payment is not only about acceptance but also includes notification, reconciliation and settlement. With the right systems in place, cashless transactions could become a source of real-time business intelligence rather than just a method of exchange. Merchants can use transaction data to identify best-selling products, understand customer demographics and track purchasing patterns over time. These insights can support inventory planning, store layout decisions and broader business strategy. Without the operational systems to process this information, businesses are automating only the customer-facing transactions while much of the back-end work remains manual.

One of the biggest challenges for payment solution providers is convincing MSMEs that investing beyond basic acceptance is worthwhile. Many merchants today are happy that they are capable of displaying a QR code at their store. That is good enough for them already and then everything else is just like business as usual. From his experience, many MSMEs see enhanced payment solutions as an additional expense on top of their existing payment gateway costs. Tee argues that this opinion misses the broader value of the digital payment infrastructure. Rather than simply adding another payment channel, he likens the investment to automating a production line. This improves the efficiency of the entire business rather than just one function. Although discussions on advanced payment systems often focus on MSMEs, Tee says larger enterprises would also benefit from digital payment ecosystems. The difference is that bigger companies are generally more familiar with these capabilities and typically require customised tools that can be integrated with their existing systems.

Smaller and underserved businesses benefit more from all-in-one platforms. For smaller companies or the underserved, this is where we practise the all-in-one approach. Once they have reached full capability and start to diversify, that is when the customisation options will be introduced. Beyond improving business operations, Tee believes payment data can play a much bigger role in expanding access to financial services. To reach the maximum potential of taking this data and translating it into something useful for external parties to look at and offer services like insurance, it requires the payment system to not only be about acceptance. For smaller businesses, structured payment records could provide evidence of sales performance and cash flow. This helps them demonstrate creditworthiness when applying for financing. This forms the next phase of Paydibs’ growth strategy: using payment records captured on its platform to support access to financial services instead of relying solely on traditional financial documents. We are trying to embed financial services on top of our payment solutions. As we start to help [MSMEs] process payments, they will also begin to have more visibility of their sales volume, their turnaround and the cash flow that they have. With this data, we will have all the components we require to apply for financing.

Tee says achieving this will require closer collaboration among payment providers, banks and regulators while maintaining robust compliance standards. From a compliance perspective, from a bank’s perspective, from the perspective of a player like us, we wish to simplify the onboarding and the compliance framework so that it is easier to understand while not compromising on safety. He believes payment providers should structure transaction data in a standardised format that can be securely shared with relevant financial institutions. [Payment solution providers] can structure the dataset in a way that it can be shared between all relevant players. The idea is that this can then reach financial players and, with the right data, we can understand what type of data is needed and standardise processes accordingly. Greater interoperability would allow merchants to use a common dataset across multiple financial institutions instead of preparing different sets of documents for each lender. Once this standardisation is in place, businesses would then have a standardised document they can bring to banks. Since the data would be interoperable, the merchant would not need to go to only one specific bank.