Banking sector seeks clarity on new govt’s spending


The banking sector is waiting for a clear direction on the country’s new vision in terms of government spending, prior to the tabling of the upcoming Budget 2019.

AMMB Holdings Bhd (AmBank) group CEO Datuk Sulaiman Mohd Tahir said a clear direction of the government’s spending is needed, especially in areas that have more direct impact on the people.

“Clarity is needed right now in terms of the direction of spending of post budget, especially on things that are important for the people such as healthcare and education,” Sulaiman said at the launch of the Direct Merchant Settlement (DMS) in Kuala Lumpur yesterday.

Sulaiman said clarity is needed as the people’s economy is the main driver of businesses. He said the banking sector will welcome a budget that puts greater focus on industries that can improve the lives of the people.

He said the government needs to further enlighten the industry on the funding aspect by virtue of the deficit level as the country has embarked on the Sales and Services Tax system in order to boost confidence to the economy.

As it is, Sulaiman said a dialogue session with the government will be held on Oct 9 on the “new dawn of Malaysia”, which could shed light on the Pakatan Harapan government’s first budget that would be tabled in Parliament on Nov 2.

Meanwhile, the DMS service was introduced by Payments Network Malaysia Sdn Bhd (PayNet) with AmBank being appointed as the cash management bank for the system.

The implementation of the DMS will allow Financial Process Exchange (FPX) and MyDebit merchants’ daily sales proceeds to be paid directly without passing through the acquirers’ bank accounts.

DMS allows PayNet to centrally manage third party acquirers’ (TPAs) payments to merchants and enhances merchants’ collection process.

TPAs under the DMS programme include ManagePay Sdn Bhd, Mobility One Sdn Bhd, MOLPAY Sdn Bhd, Revenue Harvest Sdn Bhd, Revenue Solution Sdn Bhd, Ipay88 Sdn Bhd, GHL CardPay Sdn Bhd and GHL ePayments Sdn Bhd.

PayNet group CEO Peter Schiesser said the DMS mechanism will mitigate settlement risks arising from non-bank acquirers’ participation in FPX and MyDebit.

“Our intention is to safeguard public confidence in our FPX and MyDebit ecosystems by ensuring that payments from customer purchases are directed to merchants correctly and on a timely basis,” he said.

He said the DMS will enable PayNet and acquirers to build a pattern of merchant payment proceeds and any unusual deviation can be flagged for review and investigation.

Overall, the new system will boost the e-payment eco-system in the country especially for small and medium enterprises in the e-commerce segment.

Latest data by Bank Negara Malaysia showed that e-payment card spending has increased by more than threefold since 2006 to RM176 billion in 2017. E-payment per capita has more than doubled to 111 transactions per capita between 2011 and 2017.

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

Globally, RM106 billion was raised for the financial technology industry last year and 30% of that has been spent on payment companies.

Additionally, digital payment system has been growing in Asia and Europe, with 80% of transactions in Korea are now cashless and over 90% of consumers in China adopting cashless payment method.