Friday 01 Dec 2023
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KUALA LUMPUR (June 11): Bank Negara Malaysia (BNM) said today electronic money (e-money) liabilities, which refer to funds collected by e-money issuers from their customers, have grown significantly from about RM500 million to RM1.6 billion in the past five years due to the proliferation of mobile technology such as quick response (QR) codes and mobile applications (apps), digitalisation of financial services and shifts in consumer behaviour.

According to BNM's e-money exposure draft which was published today on the central bank's website, BNM said the use of e-money for payments has steadily recorded a double-digit growth for the past five years and the form of e-money has progressed from the traditional stored-value cards to network-based solutions such as online accounts or e-wallets.

"E-money represents 33% of total electronic payments (e-payments) in Malaysia, with 131% increase in e-wallet transactions to RM600 million in 2020 as compared to RM300 million in 2019. For the past five years, e-money liabilities have also grown significantly from RM500 million to RM1.6 billion.

"Therefore, given the growing prominence of e-money in the e-payments landscape, enhancements to the e-money regulatory framework are needed to ensure e-money continues to be a safe and reliable payment instrument amidst the increase in functionalities and evolvement in the enabling technology.

"It is important to ensure the safety of the e-money funds and the soundness of the e-money issuers in order to mitigate potential risk of loss to customers, as well as, to foster public confidence in the use of e-money," BNM said.

BNM defines e-money as a payment instrument that stores monetary value that is paid in advance by the user to e-money issuers.

BNM said e-money can be used to make payments for purchases of goods and services to merchants who accept e-money as a mode of payment and that e-money users may also send or receive funds to or from another user's e-money or bank account, respectively, through person-to-person fund transfer service if the e-money issuer enables such service.

"This exposure draft sets out BNM's proposed requirements and guidance for issuers of e-money approved pursuant to section 11 of the Financial Services Act 2013 or the Islamic Financial Services Act 2013. 

"The bank (BNM) invites written feedback on the proposals in this exposure draft, including suggestions on areas to be clarified or elaborated further and any alternative proposals that the bank should consider. 

"The written feedback should be supported with clear rationale, accompanying evidence or illustrations as appropriate to facilitate the bank's assessment," BNM said.

Responses to the exposure draft must be submitted to BNM by July 31, 2021, according to the central bank.

Edited ByChong Jin Hun
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