KUALA LUMPUR, Dec. 8 (Xinhua) -- Malaysian central bank governor Muhammad Ibrahim on Friday annouced a slew of measures which he said are necessary to encourage the country's migration to electronic payments and reduce the "costly and inefficient" use of cheques.
Speaking at the Payments Forum & Exhibition 2017 sponsored by the Bank Negara Malaysia, Muhammad said Malaysia must embrace the next wave of technological and e-payment transformation, as society has become increasingly digital and connected, and market players have become more abundant, diverse and increasingly non-traditional.
Citing a study, he said the current use of cheques in Malaysia, at 120 million annually, translates into an enormous cost of 484 million ringgit (119 million U.S. dollars), a sheer wastage of the economy.
To accelerate the displacement of cheques, he said cheque fee will be doubled to 1 ringgit starting from the January 2021 and the online banking transfer fee, currently at 0.5 ringgit per transaction, will be waived for transactions up to 5,000 ringgit from 2018.
The central bank also released an Inter-operable Credit Transfer Framework for consultation on Thursday, which Muhammad said aims to connect both banks and eligible non-bank e-money issuers.
"For the first time in our history, customers of both banks and non-banks will soon be able to transfer funds across the network seamlessly by just referencing the mobile number and IC numbers of the recipients or scanning the Quick Response code of the recipients," he said.
The governor envisaged that by the end of 2020, individuals and businesses will be able to make and receive payments seamlessly via online banking, payment cards and mobile payments.
Malaysia's migration to e-payments could potentially benefit Alibaba and Tencent, two Chinese tech giants which are planning the expansion of their payment affiliates Alipay and WeChat pay in Southeast Asia, said Lee Heng Guie, executive director of ACCCIM Socio-Economic Research Centre.
After the speech of Muhammad Ibrahim, two senior executives from Tencent and Alibaba's Ant Financial, respectively took the stage and told the story of their payment success stories in China and how Malaysia could emulate that success.
In November, Alipay formed a joint venture with local payment service provider Touch 'n Go while WeChat Pay has teamed up with Malaysia's Hong Leong Bank to offer payment services to Chinese tourists.