Advancing SMEs to e-payment

WITH the crime rate rising, carrying a lot of cash in one's purse is probably not an advisable thing to do. Personally, I have stopped carrying large amounts of bills in my handbag as I am more comfortable with either the debit or the credit card.

Source from (Business Times): http://www.btimes.com.my/Current_News/BTIMES/articles/esah/Article/
Published: January 21, 2013

The current banking offerings are also driving us consumers to adopt and use the more advanced technological features for all our banking needs. In fact, I no longer need to go to the post office now to settle my utility bills as it can all be literally done at my fingertips.

Now, with the aid of technology, SMEs will also be able to enjoy hassle-free banking transactions.

I am sure those of you who had the privilege to spend your holidays overseas are overwhelmed that taxis in those countries accept credit or debit cards.

In fact, even our favourite mamak restaurants have begun to accept credit/debit cards! In keeping up with the Joneses, SME Corp initiated the programme 'Enabling ePayment for SMEs and Microenterprises'.

This project, under the "Digital Malaysia" initiative is aimed at increasing the adoption of e-payment among SMEs, in particular the micro enterprises. It is a platform that provides service for entrepreneurs to accept credit card payments from their technologically savvy smartphones such as iPhones, Blackberry, Samsung Galaxy, iPads, tablets or androids.

Unfortunately, many SMEs, in particular micro enterprises, are still reluctant to acquire the e-payment facility, citing among others, budgetary constraints and the tedious process of e-payment.

Nonetheless, with the availability of this platform, SMEs and micro enterprises are able to transact this e-payment business hassle-free!

How does this e-payment work?

A piece of hardware, essentially a tiny card reader (or termed as "dongle") will be installed at the bottom of a smartphone or tablet device. Whenever there is a business transaction, the credit or debit card will be placed in the card reader and the details of the items or services purchased will be processed, whereby the financial transaction will be uploaded into the smartphone or tablet.

With this, micro enterprises such as your family grocery shop, or your neighbourhood hair salon or even your favourite "nasi lemak" seller can start accepting electronic payments without much hassle!

This is indeed an area we are strongly focusing on as we want to help broaden the revenue base of micro enterprises, especially now that they can accept payments through credit or debit cards for goods sold and services offered.

I hope that this facility will especially assist many "mom-and-pop shops" and stalls throughout the country as they would otherwise not qualify to enjoy these facilities from the banks as they would not meet the minimum monthly sales requirements from the current credit card system.

In this intitiative, SME Corp will be subsidising 10,000 terminals with Third Party Acquirers (TPA) needing to sell three terminals to get the fourth one free.

In essence, the TPA will enjoy a 25 per cent discount for every four devices sold and the discount savings will be passed on to the micro enterprises. Each micro enterprise is allowed a maximum of two devices under this programme with the cost of the hardware ranging from RM300 to RM700 each.

Our target is that by 2020, this project is expected to generate 1,125,000 million ePayment merchant outlet points enabled by the Electronic Funds Transfer Point-of- Sale (EFTPOS) terminal. I wish to also share that the project's target for 2012 to reach out to 25,000 merchant outlets has been met, although the project was only started in the last quarter of the year.

In reaching out to the e-payment merchant outlets points, we wanted the market segment to be different and targeted the operators of "pasar tani", small restaurants, night market, flea market as well as cottage industries, among others.

In order for SMEs and micro enter-prises to participate in this program-me, they must first of all ensure that they are legal business entities registered under the Business Act 1956 or Company Act 1965; fulfil the defi-nition of SMEs and micro enterprises, have at least 60 per cent Malay-sian equity; possess a valid business licence from the local authority; and subscribe to only one of the approved Third Party Acquirer (TPA).

SMEs and micro enterprises who are interested to enable themselves with the ePayment merchant outlet points can access to one of the following appointed Third Party Acquirer (TPA) website www.managepay.com or www.revenue.com.my. So, wait no more!

With all the facilities in place, business is definitely made simple, less hassle and cash-free!

Datuk Hafsah Hashim is the chief executive officer of Small and Medium Enterprises Corporation Malaysia (SME Corp Malaysia). To access SME Corp Malaysia online, click on www.smecorp.gov.my