Name
Global FinTech Guide
Country _ Name
Malaysia
SectionTitle
Payment services
Body
FinTechs belonging to this category offer alternative payment services which are supposed to provide a faster and cheaper way for national, European, and international payments for private and business customers by using new technologies.

For example, payment service providers hereby offer solutions to easily integrate several payment services in online shops.

Some FinTechs furthermore provide real cash register systems and online-reservation solutions for restaurants and shops providing their own payment services or making use of the payment services of FinTechs described above.

Introduction

Attitude of the country towards modern payment services

The general public is receptive of the development within this segment in such that the Malaysian society is becoming less reliant on cash and is more inclined towards modern payment services. The regulators are also known to be supportive of the developments within this segment. There is a preference for modern payment services such as mobile banking. Electronic money (“e-money”) has also increased in popularity as the preferred method of payment in the past few years following the pandemic to avoid or minimise physical contact and given the rise of e-commerce.

Legal affairs

Obligations and requirements to provide payment services or ancillary services described above

Payment services are regulated by the Central Bank of Malaysia (“BNM”) which formulates the regulatory framework via the Financial Services Act 2013 (“FSA”) to ensure the safety, reliability, and efficiency of payment systems infrastructure in Malaysia. Operators of payment systems or issuers of a designated payment instrument (i.e. e-money) are required to obtain approval from the BNM.

Applicants for e-money issuers must have a minimum share capital of RM100,000 (for small scheme) (approximately USD22,730) or RM 5 million (for large scheme) (approximately USD1,136,500) and must be able to demonstrate, among others, the feasibility and viability of the proposed e-money business, including target market and potential demand supported by projected cash flow of at least three (3) years. 

To support the growth of innovative payment solutions in Malaysia, including credit transfer services through mobile devices, the BNM has issued the Interoperable Credit Transfer Framework (“ICTF”) which seeks to enable interoperability of credit transfer services among financial services providers in Malaysia using shared payment infrastructure. The ICTF is applicable to financial services providers in Malaysia, in particular the providers of payment services in Malaysia including the operator of a shared payment infrastructure.

The ICTF outlines requirements aimed at:

    a) enabling interoperability of credit transfer services leveraging on shared payment infrastructure to expand network reach and avoid market fragmentation;
    b) ensuring fair and open access to shared payment infrastructure to promote a level playing field and foster collaboration at the infrastructure level;
    c) facilitating effective oversight of shared payment infrastructure to maintain the safety and integrity of credit transfer systems and to ensure the integrity and stability of the financial system;
    d) encouraging innovation thr

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