Malaysia’s modern economy runs on a robust digital payment infrastructure.

Every tap, scan and click is a part of a complex network of systems that enables near-instant value transfer across the economy — powering everything from daily coffee purchases to billion-dollar corporate transactions.

Payments Network Malaysia Sdn Bhd (PayNet) has played a vital role in this regard, serving as the national payments network and shared central infrastructure for the country’s financial markets.

The company had its beginnings in 1996 as the Malaysian Electronic Payment System (MEPS), launching the first shared ATM network for local banks. The network eliminated the need for consumers to maintain multiple ATM cards, marking the country’s first step towards payment infrastructure consolidation.

PayNet saw rapid expansion of digital payment capabilities throughout the 2000s. The company introduced InterBank GIRO in 2000, which streamlined recurring payments such as payroll and pensions.

In 2004, it became the world’s first network to fully migrate ATM cards from magnetic stripe to chip technology to mitigate counterfeit card fraud. PayNet launched Financial Process Exchange (FPX) that same year, laying the groundwork for internet-based payment systems.

The mid-2000s saw PayNet’s regional expansion, establishing cross-border ATM links with Indonesia, Singapore, Thailand and China.

A pivotal moment came in 2017 when MEPS merged with Malaysian Electronic Clearing Corporation (MyClear), forming today’s PayNet, combining retail payment systems with high-value payment and securities services.

The following years saw PayNet’s transformation into a comprehensive digital payment provider. This included the launch of DuitNow in 2018 and the National Fraud Portal in August 2024 to combat financial fraud.

Today, PayNet has become foundational to the Malaysian digital economy.

As at 2023, it had processed over RM5.2 trillion in transaction value, equivalent to over three times Malaysia’s real gross domestic product (GDP). PayNet has facilitated 4.4 billion digital transactions, with DuitNow Transfer, MyDebit and FPX being the top contributors. Additionally, it has also enabled more than 370,000 small businesses with digital payment capabilities.

At the heart of PayNet lies DuitNow, the company’s flagship real-time payment system. It transformed how Malaysians transfer money by enabling users to send funds using just mobile numbers or MyKad numbers — eliminating the need to remember complex bank account details.

Through DuitNow, businesses can receive payments easily, improving cash flow management and reducing the complexity of reconciliation. Financial institutions also benefit from standardised infrastructure, reducing operational expenses and technical complexity.

DuitNow was one of PayNet’s top three transaction volume contributors in 2023, processing millions of instant transfers daily. With 42 participating banks, DuitNow QR has also become Malaysia’s national QR standard for retail payments with over two million DuitNow QR touchpoints nationwide.

While DuitNow handles instant, lower-value transfers, PayNet’s Interbank GIRO (IBG) system serves as the backbone of the country’s large-value and bulk-payment needs. IBG processes everything from corporate payrolls and dividend payments to government disbursements, handling transaction values that can reach billions of ringgit daily.

The system has evolved significantly since its introduction in 2000. What began as a basic batch processing service now offers near-instant transfer capabilities.

Compared with DuitNow, IBG enables businesses to manage their cash flow more efficiently with higher transfer limits, lower costs and scheduled payments — making it an ideal choice for corporate Malaysia’s systematic payment needs, such as payroll disbursement or regular payments.

Beyond digital transfers, PayNet maintains Malaysia’s national debit card infrastructure through MyDebit. With MyDebit, Malaysia became the first country in the world to fully migrate from magnetic stripe to chip-based ATM cards in 2004, setting the standard for fraud prevention.

Today, MyDebit's reach extends across point-of-sale (POS) terminals available nationwide, enabling Malaysian cardholders to make cashless payments at everything from major retail chains to neighbourhood shops. The system offers lower transaction costs compared with international card schemes, making it particularly attractive for both merchants and consumers.

PayNet’s systems extend beyond Malaysian borders. The company created seamless payment corridors across Asean’s major economies by establishing QR payment connectivity with Singapore, Indonesia, Thailand and China, for example.

It has also enabled cross-border point-of-sale payments between Malaysia’s MyDebit and Singapore’s Network for Electronic Transfers (NETS). Cardholders can make point-of-sale payments in Singapore and vice versa — a significant step towards regional payment integration.

Online financial fraud is a rising concern among Malaysians. Toward this end, Bank Negara Malaysia (BNM), together with PayNet and 16 other financial institutions, launched the national fraud portal (NFP) in August as an integrated platform to further enhance the timeliness and effectiveness in tracing stolen funds of fraud victims. NFP automates the detection and response to scams, particularly targeting online financial fraud and the misuse of mule accounts.

Working in tandem with the National Scam Response Centre (NSRC), the NFP system has reduced fund tracing time by 75%. Since its launch, the portal has facilitated a 33% increase in frozen illicit funds and improved mule account detection rates by 45%.

This achievement can be partly attributed to PayNet’s migration of its reporting services to a modern data analytics platform on Amazon Web Services (AWS) in May 2023. This has resulted in near real-time views of digital banking settlement positions, significantly improving operational efficiency by processing over 20 million payment transactions daily. The ability to ingest larger volumes of data allows PayNet to uncover fraudulent activities more effectively using artificial intelligence (AI), thus improving security across its payment systems.

PayNet’s efforts in combating fraud have also yielded unexpected benefits in user experience. For example, a recent collaboration with RHB Banking Group introduced the Dynamic DuitNow QR Sound Box, which provides voice and display notifications for payment confirmation. This simple solution helps merchants, particularly in food & beverage and retail, to verify transaction legitimacy in real time.

Beyond securing the payment ecosystem, PayNet has focused on making digital payments accessible to all Malaysians. In 2023, the company launched PayNet Cambah, an initiative focused on equipping small and medium enterprises with the skills and knowledge to leverage digital payments in their operations.

Infrastructure provision aside, PayNet is also addressing the growing demand for digitally skilled workers in Malaysia’s financial services sector through Program Akar, a collaboration with AWS re/Start.

Launched in July 2024, Program Akar offers free, comprehensive training in cloud computing and digital technologies to tertiary students. Participants of the 47-day course will earn the AWS Cloud Practitioner Certification.

Beyond training, Program Akar provides graduates with internship and job placement support through partnerships with major financial institutions, including Bank Negara Malaysia and Maybank, creating a direct pathway into the workforce.

Moving forward, PayNet will further align itself with the government’s digital transformation agenda. In 2023 alone, partnerships resulted in nine government agencies achieving over 95% digital payment adoption and processing transactions worth RM124.4 million.

This success sets the foundation for broader government-wide digital payment adoption. PayNet continues to work closely with various ministries and agencies to enhance payment efficiency, reduce operational costs and improve service delivery to citizens.

To support this growing digital payment ecosystem, PayNet is doubling down on infrastructure modernisation. The company has plans to leverage cloud technology and AI for enhanced payment processing capabilities. These investments aim to increase system resilience and scalability as Malaysia’s digital transaction volumes continue to grow.

On the regional front, PayNet aims to strengthen the country’s position as Asean’s digital payment hub. Building upon its successful cross-border payment corridors with Singapore, Indonesia, Thailand and China, it plans to expand these connections to more countries in the region.

PayNet already serves as a model for other Asean nations developing their digital payment capabilities. As regional payment integration accelerates, the company’s infrastructure and expertise will play a crucial role in shaping the region’s digital payment landscape.

As Malaysia continues its journey towards becoming a fully digital economy, PayNet’s role extends beyond being a payment infrastructure provider. From enabling government digital transformation and modernising payment systems to driving regional integration, the company has become a cornerstone of the nation’s financial ecosystem.