Transformation of payment landscape
Published on: Wednesday, August 05, 2015
Kota Kinabalu: Bank Negara Malaysia has over the last couple of years been working with the banking industry on various initiatives to bring about a transformation of the payment landscape. Bank Negara Director of Payment Systems Policy Department, Tan Nyat Chuan, said the initiatives included the enhancement of infrastructure at the payment network level as well as the individual bank level.He said a lot of features have been introduced such as payment references for Interbank GIRO service (IBG) and interbank funds transfer service (IBFT) for reconciliation of payments.
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"The banking industry has also made the payment services even more accessible, we (used to) offer the online services through internet banking. The same services have now been made available on ATMs."With the pricing reforms, a lot of these fees for these services have come down. So what used to be RM1 or RM2 for instant interbank fund transfer has come down to only 50 sen at the maximum."For the IBG, as you know we have brought it down from RM2 to 10 sen, this was in May 2013," he said at the launch of Bank Negara's 2015 National e-Payment Roadshow here on Tuesday. Tan also said they have this year introduced their Payment Card Reform Framework where they have issued a guideline, after a month long consultation with the public, and the guidelines came into force on July 1.
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"What is special of the guidelines is that the fees for debit card acceptance is likely to come down. The reason for that is that we have implemented ceilings to the debit card interchange fees."So for instance, the international debit card interchange levels have come down to almost five times so there will be a commensurate drop in merchant fees for the acceptance of debit card."
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Tan said the interchange fee, which for forms a significant part of the Merchant Discount Rates (MDR) payable by merchants, for debit cards was lowered from an average of 1 per cent to 0.21 per cent for international debit cards and from 0.4 per cent to 0.15 per cent for domestic debit cards.He added that this was necessary as the growth of payment terminals have exceeded the growth of the population. He said compared to other countries, which have roughly close to 30 terminals per thousand inhabitants, in Malaysia there were about eight terminals per thousand inhabitants. Therefore, he said Bank Negara wants to increase the number of terminals from eight per thousand inhabitants to 25 per thousand inhabitants by year 2020."This will see the expansion of the payment card point of sale terminals expand from 240, 000 terminals as at the end of 2014 to 800, 000 terminals by year 2020."With the expansion of the payment card network, to be more widely acceptable the public will the convenience of being able to use their ATM cards today which are mainly for cash withdrawals to now use it to the point of sale to make purchases."So in other words, you no longer have to find an ATM (to) withdraw cash only to make those purchases. Just go to the merchants that have been enabled with the acceptance of your ATM cards and you can use your ATM cards to make those transactions by just keying in your pin."Tan also said merchants will benefit greatly in using e-payments as they stand a chance to save time and money by migrating to e-payments. "Merchants will benefit from several areas (such as) efficiency. Now, you go on contactless basis, tap and go, so the (customer) queue will be faster. "Secondly the cashiers need no longer have to count the cash, so they (merchants) save on man hours. (They) no longer have to incur security costs to transport it to the bank (and) they no longer spend time reconciling various records in terms of the movement of cash until the bank in."So there are a lot of costs savings and efficiency gains for the small merchants as well as the large merchants if they can go into electronic payment."Additionally, Tan also said the e-payment method was safe provided all factions play their role where the public need to make an effort to learn and adhere to the safety practices of using online banking. "The banks are required to adhere to Bank Negara's security standards and from time and time again we review those standards with the individual banks. "On the other hand, the public will need to make an effort to learn about the safe practices of online banking and e-payments. So (it is) encumbered upon the customers to reach out to the banks and learn about the simple do's and don'ts to stay safe on e-payments."He said also if the public find they have not been dealt with fairly by any banks, they were encouraged to lodge a complaint to Bank Negara."We will look into the individual cases to make sure the bank is responsible and have acted fairly to provide you with their services in a safe and convenient way," he said.Association of Banks in Malaysia Executive Director Chuah Mei Lin, on the other hand, added that the association's website, (www.abm.org.my) had a prominent section that highlights on the safety do's and don'ts when using e-payment.She said the site also gives visitors the modus operandi for some of the current happenings so that they can be perfectly aware of it.She also said the association of late has been collaborating with the Malaysian Communications and Multimedia Commission (MCMC) to ensure that there is proper public education in regards of safety measures when using e-payments.Stay up-to-date by following Daily Express’s Telegram channel.
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