Bank Negara Malaysia will be coming out with requirements for virtual bank licensing by the year-end, governor Datuk Nor Shamsiah Mohd Yunus said. NSTP/ASYRAF HAMZAH

KUALA LUMPUR: Bank Negara Malaysia will be coming out with requirements for virtual bank licensing by the year-end, governor Datuk Nor Shamsiah Mohd Yunus said.

“We had a briefing this morning with stakeholders and Bank Negara will be coming out with the licensing requirements for virtual banks. We hope to come out with the requirements by end of the year.

“We have had some interests and discussions with a few banks which have established virtual banks overseas but these are at a very preliminary stage,” she said during Bank Negara Annual Report 2018 media briefing here today.

In January, CIMB opened an all-digital bank in the Philippines, completing its footprint in Asean, after opening in Vietnam in December.

The bank will operate an app in partnership with convenience stores and digital payment platforms.

Meanwhile, Bank Negara said further progress was made in the migration to e-payments during the year.

It said the volume of cheques reduced by more than half to 101.4 million in 2018 from 204.9 million in 2011.

“While cash usage remains prevalent in Malaysia for retail transations, the ratio of cash-in-circulation to gross domestic product (CIC/GDP) also started to demonstrate a declining trend.

“The expansion of e-payment acceptance points among retail merchants, coupled with the migration of payment cars to support PIN and contactless functionalities contributed to the increased use of payment cards,” it said.

Bank Negara said in particular, debit card transactions grew by 51.5 per cent to 245.7 million transactions in 2018 from 162.2 million in 2017.

It said the adoption of credit transfer services has continued to gain traction, largely driven by the substantial growth in the usage of instant transfer, following the fee waiver for transactions of RM5,000 and below for individuals and small and medium enterprises.

Mobile payments have also gained momentum in displacing cash for low value transactions, with total mobile payment transactions recording a significant increase to 23.7 million transactions in 2018 from 1.2 million transactions in 2017, supported by an expanded network of merchants that accept mobile payments.

“With the growing presence of non-banks in the mobile payment segment, the bank implemented the Interoperable Credit Transfer Framework to enable interoperability between banks and non-banks via a shared payment infrastructure.

“This aims to preserve competition and innovation in the payment market, while optimizing positive network effects that are critical to benefit users of different payment services,” it said.