KUALA LUMPUR (June 22):  Ministry of Finance (MOF) secretary general Tan Sri Johan Mahmood Merican has told a parliamentary committee that the Sumbangan Asas Rahmah (Sara) programme uses the MyKasih’s terminals, transaction and settlement system because it is a proven way to disburse cashless aid.

Partnered retailers selected by the MOF are provided the point-of-sale machine with specific software, and MyKasih charges 1% on each transaction.

“We see it as being more or less similar to what is being charged by, for example, credit cards,” Johan told the committee on Jan 26, according to a report released Monday.

On MyKasih’s appointment, Johan said that in the government’s search for a method to channel cashless assistance, it found that MyKasih had the track record of operating for a long time as a service provider for aid programmes for various organisations, including foundations of government-linked companies (GLCs).

“That was the government’s consideration in choosing MyKasih as an existing aid distribution mechanism rather than creating a new system,” he said,

MyKasih, a charity organisation, was established 16 years ago in 2009, having piloted the MyKad cashless welfare system in December 2008 to undertake its own aid programme and subsequently on behalf of others.

Questions had been asked previously in Parliament about the selection process and the 1% charge.

In a separate meeting on Feb 12, MyKasih deputy chairman Jeffery Perera explained to the committee that the Sara programme hinges on sophisticated cutting-edge technology using MyKad.

‘We are the only company at the moment in the country that has developed the capability to use the MyKad for delivery of welfare in a cashless way,” Perera said.

“There has been no change, we have not reengineered the operating model. That 1% has persisted from 2009 to what it is today,” he added.

He noted the rate was discussed with Bank Negara Malaysia and was benchmarked against market practice — which ranges between 0.9% to 1.5%. The 1% charge is to finance costs such as terminals, maintenance and operational costs.

Sara subsidises the cost of 14 groups of essential goods to lessen the cost-of-living burden. It comprises two components: a monthly targeted assistance programme for vulnerable groups and a one-off RM100 assistance for all Malaysians aged 18 and above.

With the latter, a one-off RM100 aid was distributed to 22 million eligible recipients in February, under a total allocation of RM2.2 billion and valid until end-December this year. A prior round of RM100 credit was distributed in end-August last year with a validity window to end-December 2025.

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