23rd September 2025 - 2 min read
The government has confirmed that there are no plans to review the rounding mechanism for cash transactions to the nearest five sen. This system, which has been in place since 2008, will continue as it is considered to be functioning effectively.
Finance Minister II Datuk Seri Amir Hamzah Azizan explained that the mechanism does not create issues for businesses or consumers. “For now, the current system still applies. Let the system continue as it does not affect existing businesses,” he said during a press conference.
Recent discussions have raised questions about whether the rounding system disadvantages consumers and benefits merchants. Critics argue that with more people paying electronically, the system is no longer as relevant. Digital transactions always charge the exact amount, which means rounding applies only to physical cash payments.
Despite these concerns, the Finance Ministry has maintained that the current approach works well and does not require changes at this time.
The rounding system was introduced by Bank Negara Malaysia and officially adopted on 1 April 2008. It was implemented to simplify cash transactions after one-sen coins were withdrawn from circulation. At the time, producing and handling one-sen coins was considered inefficient.
The system ensures that the final bill is rounded to the nearest five sen. It only applies to the total bill, not to individual item prices, and is used solely for cash payments.
Under the mechanism, amounts ending in one, two, six, or seven sen are rounded down, while amounts ending in three, four, eight, or nine sen are rounded up. For example, a bill of RM10.02 will be rounded down to RM10.00, while RM10.03 will be rounded up to RM10.05.
This approach is designed to balance out overpayments and underpayments across many transactions. According to Bank Negara, the rounding has minimal financial impact on both consumers and businesses.
With the rise of e-wallets, debit cards, and online banking, most Malaysians now make payments without using cash. In these cases, no rounding takes place, as digital systems process the precise amount to the sen.
The government has emphasised that this distinction ensures fairness for both consumers and merchants, while the rounding system continues to serve its original purpose for cash-based transactions.
Follow us on our official WhatsApp channel for the latest money tips and updates.
Samuel writes about personal finance and financial news, focusing on how banking updates, policies, and promotions affect everyday money decisions. He enjoys making complicated financial topics easier to follow. Outside of writing, he spends his time watching TV shows and occasionally convincing himself he will only watch one episode.
Comments (2)
“With the rise of e-wallets, debit cards, and online banking, most Malaysians now make payments without using cash. In these cases, no rounding takes place, as digital systems process the precise amount to the sen.”
This is simply untrue – if you go to physical outlets or even certain digital outlets (e.g. Lotus’s Online), they still practice the rounding effect.
You’re right that some outlets still apply rounding at the final bill, even when you’re paying with cards or e-wallets. Technically, Bank Negara’s guideline on rounding was only meant for cash transactions, but in practice some merchants extend it to all payments for consistency in their billing systems. The key distinction is that digital payment rails themselves (card networks, e-wallets, bank transfers) are able to process the exact amount to the sen. Whether rounding happens depends on the merchant’s point-of-sale setup. Thanks for pointing this out — it’s an important clarification for readers.