By Rupa Damodaran
KUALA LUMPUR: Malaysia is on the brink of the next wave of e-payment transformation, driven by the high penetration of mobile phones, to complement debit cards to displace cash.
Bank Negara Malaysia has put up the Interoperable Credit Transfer Framework (ICTF) to spur the next wave of e-payment migration.
This service, which will allow a payer to instruct his institution to transfer funds to a beneficiary, takes advantage of the 42.8 million mobile phone subscriptions in the country (70 per cent of which are smartphones).
Tan Nyat Chuan, who is director of the payment systems policy department, said the central bank has published the ICTF for public consultation. It will be effective on July 1 2018.
“What we envisage to achieve is a levelling of the playing field, where the banks and non- banks will have open access to clearing system which will facilitate the connectivity between banks and non- banks.
Through the use of Quick Response (QR) code, it facilitates seamless on-boarding onto digital payments,”he said at a media briefing on the sidelines of Payment System Forum & Exhibition 2017.
For the first time customers of both banks and non-banks will soon be able to transfer funds across the network seamlessly by just referencing the mobile number and identity card numbers of the recipients or scanning the QR code of the recipients.
This also means all players should have co-opetition and collaborate at the infrastructure level but compete when it comes to the value adding services.
Individuals and small and medium sized enterprise s would not be charged a fee for making or receiving any instant transfer transaction up to RM5,000.
The ICTF would enhance consumer protection and confidence in the use of credit transfer services.
From a journey which gave a boost to electronic fund transfers to an estimated 329 million transactions in 2017 and debit card transactions to record a 48.1 per cent growth this year, the ICTF marks a significant milestone.
On security controls in the system, Tan said BNM, as a regulator set outs the principles but it is the companies and vendors which continually test the control features to make sure they relevant.
With evolving cyber trends, security controls need to be refreshed time and time again.
Consumers must play their role and learn about the safe dos and donts by reaching out to BNM or banks for safety tips.
The number of fraud cases in the internet banking for retail in Malaysia is currently miniscule, recording a 0.002 per cent while fraud in the case of payment cards is 0.03 per cent.
On crypto currency especially bitcoin making waves in the market, Tan warned consumers and businesses to be aware of the risks involved when dealing with bitcoin.
Unlike e-money and banking services where the central bank provides oversight, prudential safeguargs and consumer protection measures, there is no consumer protection for the instrument.