On April 4 2016 at the inaugural Malaysian E-Payments Excellence Awards (MEEA) organized by MyClear, the Centrwal Bank of Malaysia's deputy governor, Datuk Muhammad bin Ibrahim said the country wants to push e-payments and make the country's financial industry more digital. Furthermore, he empathized that "safe and efficient payment systems are one of the key building blocks of a productive, competitive and successful nation."
Some of the main points that Datuk Muhammad bin Ibrahim were the following:
Fostering an enabling environment for network expansion whilst promoting competition, innovation and choice
An efficient and well-functioning payment system must not only have the economies of scale to enable lowering of costs, but also the quality of services to serve the needs of an increasingly demanding and sophisticated users. We designed our developmental efforts into two-fold:
- Foster an enabling environment for infrastructure building and network expansion to achieve the economies of scale; and
- Promote effective competition among the industry players to spur the development of innovative solutions, provide greater choices and value proposition to the public and in the process, lower costs.
Correcting price distortions
In May 2013, BNM had introduced the Pricing Reform Framework to correct the price distortions between paper-based payments and e-payments. By differentiating the prices of payment services according to their relative costs, the public are thus incentivised to use the more efficient and cost-effective e-payment services.
Strengthening competition and lowering cost
To curb the rising cost of payment card acceptance that had impeded the expansion of payment card terminals among merchants, BNM had implemented the Payment Card Reform Framework in July 2015. The Reform Framework had removed market distortions and imbued competition and transparency in the payment card market. This has resulted in the offer of higher quality and lower cost solutions, especially to the lower tier merchants.
Driving infrastructure building and network expansion
To facilitate infrastructure building and enhancements to payment services, BNM had also established market incentive structures such as the e-Payment Incentive Fund (ePIF) Framework. Under the ePIF Framework, banks are incentivised through a set of pre-requisites to invest in e-payment services, and to channel the cheque fee collected as incentives to encourage their customers to migrate to e-payments. The industry players had also established a Market Development Fund (MDF), which would channel approximately RM455 million to expand the network of payment card terminals from 240,000 in 2014 to 800,000 by 2020.