In 2013, our cash-in-circulation over GDP is 6% compared to only 2% to 4% in advanced countries. In terms of payment card usage, our payment card transaction per capita is relatively low, at only 13 transactions per capita in 2013. This is far below the level of payment card usage in the advanced countries with an average of more than 200 transactions per capita. It is also important to note that Malaysia has a higher proportion of credit card usage compared to debit card usage, with a ratio of 7 credit card transactions for every debit card transaction. In contrast, debit card usage is more prevalent in the advanced economies, at an average of 6 debit card transactions for every credit card transaction. The debit card is a more cost-effective payment instrument compared to the credit card. Greater use of debit cards would minimise the country’s retail payment cost and contribute to greater savings and efficiency. In this respect, the banking industry can play the important role of taking more proactive measures to widen the payment card acceptance infrastructure, and promote actively the usage of debit cards to the general public. It is a mutually beneficial relationship. Consumers can conduct their financial transactions in a safe, convenient and efficient manner while the banking industry can benefit through reduction in the cost of handling and managing cash. High potential for debit cards to displace cash in Malaysia Cash is an expensive payment instrument which imposes an unnecessary cost to the economy.
The challenge is to enhance efficiency and reduce costs, respond to market and regulatory demands and, most of all, gain competitive advantage through innovative products and services. Ladies and Gentlemen, The success of this IBBM-University of Nottingham collaboration will depend on the active involvement and support from the financial services industry. I therefore, encourage the industry to play a proactive role in supporting the activities organized by the Financial Services Research Forum. In concluding, I look forward to seeing greater collaborative efforts between the academia and the industry in research and development for the financial services industry. On this note, I am pleased to officially launch the collaboration between IBBM and the University of Nottingham , in the Financial Services Research Forum. Thank you. 2  BIS Review 63/2006