Colin Charles Agenda

Dear current ruling government of Malaysia,

I see you’ve decided that it would be wise to charge a RM50/year credit card tax, on a per card basis, while charging the supplementary users RM25/year. Your opposition says that you will thus make RM400 million a year in revenue, just from these fees alone.

Some are however convinced, that though you slap a tax on us credit card users, most banks will probably absorb the charges to hold on to customers. But you don’t like it, because the tax, is meant to promote prudent spending.

Now, let me tell you my opinion, as a person who liberally uses his credit card for every purchase he can use it for, because he’s kiasu to get rewards points. To boot, I also settle all my bills on time, in full. And I also have business interests, in where credit card transactions are crucial. </disclosures>

First up, the rakyat aren’t stupid. Please do not think you’re smarter than them. Telling the rakyat for example, that the EPF is the be all and end all, is just silly. Telling them that they need at most “two cards”, is no better, my friend.

Promoting the online economy
Limiting credit card transactions, harm the economy. As more and more people are getting broadband Internet access, more and more people are choosing to purchase online. Today, you can buy air tickets, groceries, cameras, services and clothes online, all thanks to a credit card. By imposing a fee, you are potentially harming the online economy, and this is not in tandem with the MSC, at all.

Discounts galore
Credit card companies like to reward their cardholders. HSBC for example, regularly rewards you in the MidValley and Gardens shopping malls. CIMB is currently rewarding shoppers at Pavillion. American Express regularly has some dining places on its rewards list. These lists go on for many banks, including Citibank, UOB, etc. These are 10-20% discounts, which mean a lot to the average Malaysian.

This encourages you to carry more than one credit card. If I may be allowed to put on my kiasu hat again, I’d like to say, this is exactly what I do. I patronise places, where I know I can get a discount. Or where I know, that if I spend RM50 on food, I get a free dessert valued at RM15. I want my ringgit to go further, and I’m sure the rest of my Malaysian friends do, too. Today, I almost always exclusively buy coffee at Starbucks with a credit card, because everything I sign off, is 10% cheaper.

No fees
Credit card companies like Citibank tell me that they’d like to slap me with an RM600 yearly fee for my credit card. I got off a plane, and at about 2.30am, I called their call centre, and told them I’d like a waiver. They did just that. Do you honestly think they’d like to charge me RM50, when they’d just waived RM600?

HSBC tells me I get my Visa Platinum and Gold MasterCard, free for life. I have a hefty limit on the Visa Platinum, and almost never use the Gold MasterCard (not many places today only accept MasterCard, thankfully). Do you think I will be cancelling it if I’m slapped with an RM50 fee for something I almost never use?

Public Bank likes to give me credit cards that are free too. To boot, they give me a 0.7% rebate for every ringgit spent. Now, remember, I am kiasu, and I like seeing my rebates. Would you honestly think I want to spend RM50 of it, on fees? (make that RM100/year, for both Visa and MasterCard).

Quick math tells me that I’ll have to spend nearly RM15,000 just to get my cash back, to pay the government.

Incidentally, a lot of banks throw credit cards against those that hold a loan at their bank. They are free of fees. Should they also now be slapped with an RM50 fee?

Electronic transactions are safer
I lived in Australia for many years. There, you can pay for everything, from a 5-dollar latte to a 100-dollar taxi ride, using your bank card, via EFTPOS (Electronic Funds Transfer at Point Of Sale). There are lofty goals with MEPS in Malaysia, but its just not widely used.

However, credit cards are widely used and available. No, I still can’t pay for a taxi ride, and we’re very far behind in comparison to Australia, or our little neighbour down south, Singapore, but at least, we’re getting there.

Charging fees will probably hamper the use of electronic transactions. I have a dream, that when I go to a mamak stall, and order myself a roti telur (double telur!), and a teh tarik, I can use my credit (or debit) card, and pay for it.

Malaysia has always aimed to be a modern society, and if we can go cashless, we’ll be safer. Crime in Malaysia is already so high, and the last thing we need, is further encouragement from the government, for people to deal in cash transactions. The more we can move to electronic transactions, the better.

Donning my business hat
Today, the average Malaysian probably buys a lot of things on these wonderful “easy payment schemes”. You take the item home, and pay for it, with 0% interest, over a period of 12-24 months. This is how people get a snazzy television, a new laptop, or a massage chair. Having less credit cards in circulation, means people potentially buy less stuff. Are you not hampering the economy, this way, as well?

One more thing…
As a frequent traveller, I can for one tell you, that the Malaysian Ringgit, is not worth very much. 1 Euro is about RM5, and 1 USD is about RM3.50. Visiting Australia, sets it at 1 AUD being about RM3, while just going down south to Singapore, 1 SGD is about RM2.50. We had a 1:1 currency with Singapore, not long ago, but this “basket peg”, has really undervalued our currency.

Travellers need more credit cards, plain and simple. What are the other options? Carry a boat load of cash, and lose it at a tourist spot? Travellers cheques, are going out of fashion, like you wouldn’t believe. And the glorious Malaysian ATM cards stop working from midnight-6am Malaysian time (yes, you have to time your withdrawals overseas). And that 6-digit PIN number, tends to not work, in countries where PINs are 4-digits long.

In conclusion
Don’t assume the rakyat to be dumb. They can plan for themselves.

Start an advertising campaign. A Flickr user, Liyin, can help. That image is off to a good start (not CC licensed unfortunately).

Don’t assume the lenders (banks) to be dumb, either. This isn’t America, and the banking regulations are a lot stricter. Credit cards usually give you a 2-3x salary limit. They ask for papers (salary slips). The banks know how much debt you can handle. Wouldn’t it be better to impose on banks to say, “no to 3x salary, but 2x salary”?

I want to see online transactions take off. And the solution is not online bank transfers (RM2 GIRO fee applies). Its credit cards.

Please don’t hurt the rakyat from spending.

Photo credit: LiewCF on Flickr.

In Singapore the last few days, I found some time to visit Orchard Road on Sunday. I thought about the best place to get an iPhone 3G and headed to Lucky Plaza. To my surprise, zip, zilch, nada.

Disappointed, as a long-time Apple user and developer, who has bought a lot of Apple gear, and been to several WWDC’s, and still continue to buy Apple gear (latest acquisition: MacBook Air), that Apple constantly assumes that there is no world outside of the USA.

So I asked myself over a very late lunch, why am I roaming the streets of Singapore, just to get myself an iPhone 3G, and have to go thru the hassle of “cracking” it? I am a legitimate user, who’s willing to pay the actual fees, yet I’m shoved for being in the wrong country.

Sub-Rant
I’ve recently changed my location from Melbourne, Australia to Kuala Lumpur, Malaysia. This is a problem for the iTunes Music Store, because while the iTunes Music Store is commonplace in America, it wasn’t long ago that it came to Australia. It still doesn’t exist yet in Malaysia. In fact, my Malaysian-issued credit card is discriminated against by Apple’s online store.

This I consider to be a large failure – I guess this will change at some stage, as the iPod Touch is sold legally in Malaysia, and applications for it must be available now (I haven’t checked this week, I’ve been pre-occupied).
</Sub-Rant>

I was extremely overjoyed that I got invited to a Facebook group (this doesn’t happen often, believe me), called iPhone 4 Malaysia. Louis Pang compares Malaysia against Equatorial Guinea, Guinea Bissau and Madagascar, showing the number of mobile phone users, GDP per capita, and population of each country. Impressed I was, seeing the Malaysian statistic:
Population: 25.3 million
GDP per capita: USD$13,000
Mobile phone users (2006): 19.4 million

77% of Malaysians have a mobile phone! This statistic is surely a fib (I think; then again, some people have more than one mobile phone), as the adult population in Malaysia is nowhere near 77% (I’m unsure what the statistic is, I’m wondering where the census data is…)

Then again, if true, how is it possible that Apple is selling iPhones in these other countries, and not in Malaysia?

Naturally, I looked at the article at The Edge Daily, and Sharmila states that Maxis gets right to distribute the iPhone 3G. There is no reason to speculate, but the cost is expected to be under RM1,000. Will this happen by year end? Who’s to say…

So, if you’ve read this far down, and you’re Steve Jobs (or someone close to him, and will pass the message on), here’s my advice:

• Give Malaysians access to the iTunes Music store – Seriously, you’re missing out on a good opportunity. With disposable incomes amongst the large majority of the iPod toting crowd, buying music via the iTunes Music Store will definitely be easier than firing up a BitTorrent client, and waiting for the download, thanks to the throttling of traffic
• Malaysian credit cards are not fraudulent – Amazon, Paypal, and the list goes on, they all have no issue accepting a Malaysian issued credit card. Why should you be any different, Jobs? With the proliferation of Visa Debit cards, surely you can’t be worried about fraud?
• Don’t cripple access to the iTunes Music Store – by this, I mean, it should not only be for applications for the iPod Touch, but also music, TV shows (I imagine people buying BBC’s Top Gear rather than downloading it), and movies

After all, proliferation of broadband is great. There is already a large amount of users who are on the Internet. There are more and more Mac users, after all, there are a tonne of new shops selling Macs (Apple Authorised Resellers/Partners). Everyone in urban areas is using the latest, greatest, mobile phone (I dare say, the average Malaysian in urban areas are more mobile phone crazy than the average Australian in urban areas),

Make a bang with your presence, Apple.

– Current multiple-time Apple customer, dormant Apple developer, iPhone 3G owner-to-be

Update: There’s also an online petition to sign. And the Facebook group is standing at 1,019 members now…

So, it seems that with effect from July 1 2008, Bank Negara Malaysia (BNM) has decided that those that don’t settle their credit card bills in full, will not be granted the 20 interest free days on new purchases. So, 18% starts the the day you make a purchase!

So for those making minimum payments, watch out. This move, will bring you deeper into debt! Yet another thing you can thank the Badawi government for, as more and more Malaysians are putting their fuel on credit.

Statistics show that one-third of the 2.7 million credit card holders in Malaysia settle their bills in full, every month. I wonder what the demographic of this is like, though.

All in all, I’m glad I started out with the practice of using a credit card as a replacement for cash, and settling the bills in full, on a monthly basis. Maybe, this move will make the idea of a debit card, a little more friendly?

Tough(er) times ahead for Malaysians, I’m sure… You think RM2.70/L is bad? Wait till it goes up (crude oil prices are at an all time high now).

Will this move, by Bank Negara, have an effect on you?