Monday, March 08, 2010

Fuel subsidy scrapped due to MyKad snag

The government has attributed the scrapping of the proposed tiered fuel subsidy to unfavourable public response and the complexity of using the MyKad as a payment instrument.

However, industry sources claimed that the latter is due to the fact that the current MyKad solution lacks the structure needed for smooth implementation of the programme.

Under the proposed programme, the transaction process involving the MyKad was meant to mirror that of a credit card's. A customer would swipe his MyKad at the outdoor pump, key in the cash amount and automatically receive a subsidy.

But FMT learnt that Malayan Banking Berhad, the company that was awarded the fuel subsidy programme, doesn't have a solution that supports the use of the MyKad at outdoor pumps.

So 70% of customers who purchase petrol in cash would be subjected to a lengthy process in order to receive their subsidy.

The cashier would have to insert a customer's MyKad into a terminal and an optical scanner will read the customer's thumb print.

The information will be sent to Maybank's database to be verified and the customer will then key in the subsidised amount at the outdoor pump.

Petrol dealers and oil companies expressed concern that this process will lead to overcrowding in petrol stations and give rise to irate customers.

The government reviewed the complexity of the process and acknowledged it as yet another reason to scrap the programme.

ePetrol's solution

At the World Congress of IT (WCIT) Convention 2008 held at the KL Convention Centre, a local company called ePetrol Holding Sdn Bhd, showcased a prototype petrol subsidy solution that works off the MyKad application.

ePetrol is an independent MSC-status company that was established in 2003 with the the purpose of driving technology and business innovation in the field of cashless retail payments.

It spent six years creating and refining a mechanism that would allow for cashless payments through the MyKad and has a patent pending on the solution.

Last year, ePetrol launched a commercial pilot programme of this payment system in collaboration with EON Bank.

Two hundred EON Bank customers used their Mykad to purchase petrol at 11 petrol stations in the Klang Valley belonging to BHPetrol, Caltex and Shell. The pilot ran for seven months during which the participants were given a rebate of RM0.15 per litre.

However, this solution also comes with a catch. For it to work, all 22 banks in Malaysia must be integrated to ePetrol.

FMT was told that the banks have shown little interest given the high cost and extensive time involved in developing this integration. Based on this, sources agree that the government's decision to award the programme to Maybank was a practical one.

Should the fuel subsidy programme get back on track again, the government will then have a second chance to ensure that a comprehensive Mykad solution at the outdoor pump is implemented for the convenience of Malaysians, oil companies and petrol dealers.

courtesy of FreeMalaysiaToday

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