Real-time retail payments platform a potential game changer

The services can transform all mobile phones into mobile wallets, emerging as a lifestyle solution for the wider public

By HABHAJAN SINGH / Pic By AFFIN BANK

Financial institutions and players connected to the industry must keep a lookout for the emergence of the realtime retail payments platform (RPP).

In fact, Bank Negara Malaysia (BNM) has signalled its emergence as a potential “game changer” for the Malaysian payment landscape.

In a recent speech, BNM governor Tan Sri Muhammad Ibrahim noted that RPP would allow Malaysians to make and receive payments conveniently using their identification card (IC), mobile and business registration numbers, or by scanning a common quick response (QR) code.

“We do not need to suffer the agony of remembering our account numbers ever again. The RPP will be facilitated by a National Addressing Database (NAD) and an interoperable QR code payment scheme.

“Seamless and secure payments between bank and non-bank e-money accounts will also become a reality,” he told a gathering at the Malaysian E-Payments Excellence Awards (MEEA) 2018 in Kuala Lumpur earlier this month.

Given the overwhelming benefits from the initiative, he said it is incumbent on all of us to drive the promotion of the RPP, such as in facilitating user registration with the NAD and merchant adoption of the common QR code.

“Let us make the RPP services a household service and transform all mobile phones into mobile wallets.

“The RPP should not be merely a banking service, but a lifestyle solution,” he told the gathered industry players at the event organised by Payments Network Malaysia Sdn Bhd (PayNet).

PayNet emerged in May 2017 as a result of the merger between Malaysian Electronic Clearing Corp Sdn Bhd (MyClear) and Malaysian Electronic Payment System Sdn Bhd (MEPS). It is led by its group CEO Peter Schiesser.

Jointly owned by BNM and the financial industry, PayNet is the operator of shared payments infrastructures for the nation.

Its ambit: To ensure Malaysia’s payments infrastructures are competitive, efficient, open and innovative, to accelerate the nation’s migration to elect ronic payments (e-payments) and to meet the existing and future needs of the economy.

E-Payments on the Rise
Looking at the rapid increase in various modes of payment, the need cannot be understated.

Payment card spending has increased by more than threefold from 2006 to RM176.9 billion in 2017, Muhammad said in his speech.

From 2011 to 2017, he said e-payments per capita had more than doubled to 111 transactions.

In the same period, the central bank had reduced cheque usage by more than 40% to 119 million cheques and almost doubled the number of point-of-sale (POS) terminals to over 407,000 units.

Debit card transactions had also increased by more than six times to 162 million transactions in 2017.

Elaborating on the RPP, Muhammad said it could offer a treasure trove of data.

“This can be mined to develop more tailored payment solutions, fraud detection capabilities, and to support potential strategic partnerships with financial or non-financial players.

“But as I mentioned earlier, confidentiality and privacy should not be compromised,” he said.

He added that part of future-proofing of the payment systems is to enhance the efficiency of cross-border payment services.

“In this globalised world, there is a growing demand for faster, reasonably priced and more transparent cross-border payments. This will become even more important as international trade and investment linkages deepen, such as through the growth of e-commerce,” he said.

Affin Bags Award
One of the winners at MEEA 2018 was Affin Bank Bhd, which bagged the JomPAY Top Acquirer Bank 2017 award.

Group CEO Kamarul Ariffin Mohd Jamil said the award proves the bank’s continuous support in driving e-payment for its customers.

MEEA is an annual event by PayNet that recognises the outstanding achievements of banks, businesses and government agencies deemed to have contributed significantly towards the excellence, innovation and growth in e-payments.

JomPAY, a national bill payment scheme, was launched in March 2017 with a target to rope in 5,000 billers by 2020.

It is a system of shared infrastructure to expand the bill collection coverage and reach for businesses in which they can gain access to the entire banking system for their customers to make payments by establishing relationship with just one bank.

The features of the system include real-time notifications of incoming customer payments — where once a business receives a JomPAY real-time notification, payment is guaranteed so the biller can immediately act on it.

At MEEA last year, Affin Bank had also won the JomPAY award for national biller acquisition for the mid-sized acquirers.