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The central bank of Malaysia has launched a new promotional campaign to expand the use of electronic payments in a bid to hit 400 transactions per capita by 2026.
Bank Negara Malaysia (BNM) has officially launched a new campaign to raise awareness of e-payment methods and build public trust in e-payment adoption.
The campaign, which roughly translates to "E-Money! Secure, Simple, Swift", seeks to educate the public on the full range of e-payments available to them and to promote safe use of them.
This includes credit and debit cards, e-wallets, and internet and mobile banking apps.
The campaign is part of the BNM’s financial inclusion strategy that aims to increase digitalisation throughout the economy, as set out in its Financial Sector Blueprint 2022-2026.
Through the e-Duit! campaign and other industry-wide initiatives, the BNM aims to increase the number of e-payment transactions by at least 15 percent annually over the next five years.
If successful, this would take Malaysia’s total e-payments per capita from 221 in 2021 to more than 400 in 2026.
BNM notes that over the last ten years, since 2011, Malaysia’s total e-payments have more than quadrupled from about 49 transactions per capita.
To put into context, 400 transactions per capita would put Malaysia’s non-cash payments usage above current levels in Germany (328), Italy (168) and Spain (243), and comparable to the likes of France (397), based on 2021 data from the European Central Bank.
The largest global payments markets, such as South Korea, the Nordics, US and Australia, currently hover around 550 to 650 transactions per capita, according to VIXIO analysis.
Although this is an ambitious target, Malaysia will be looking at the success of regional neighbours, such as Thailand, that have significantly grown e-payment usage in recent years.
For example, Thailand went from 62 non-cash transactions per capita in 2017 to almost 300 in 2021, buoyed, in particular, by growth in the country’s PromptPay instant payments system. The country is likely to reach 400 itself over the next couple of years.
However, Malaysia’s instant payments platform, DuitNow, which launched at a similar time to Thailand’s PromptPay in 2017, has not yet had the same impact as its counterpart.
The BNM said the e-Duit! campaign will be built around promotional activities, outreach programmes and educational campaigns by participating payments companies, such as operators, issuers and acquirers.
The campaign will be led by the BNM but will have support from the Financial Education Network (FEN), a state-backed platform consisting of agencies and institutions working towards improving financial literacy among Malaysian citizens.
Over the weekend, the e-Duit! campaign held its first event at an exhibition in Kuala Lumpur, in conjunction with the closing of the FEN’s Financial Literacy Month 2022 (FLM2022), whose theme this year was "Financial Well-being: Go Digital Confidently".
Throughout October, an FLM coach travelled to 61 locations across seven states, imparting free financial education resources to more than 20,000 people in both urban and rural areas.
The resources covered personal financial management, digital financial literacy, financial scam awareness and debt management advisory services.
One of the long-term goals of the BNM as outlined in its 2022-26 roadmap is to narrow the gap in financial literacy between Malaysia and the Organisation for Economic Co-operation and Development (OECD) average.
“Together with efforts to raise public awareness and confidence in the use of e-payments, these initiatives have made it easier for Malaysians and businesses to make and receive payments, be it in the physical or online world,” said the BNM.
“These developments were vital in helping Malaysians manage the shock of the pandemic — which called for more contactless and digital transactions.”
Lowering costs, growing acceptance
Additionally, as outlined in the 2022-26 roadmap, the BNM said it will continue to lower the cost of e-payments and address price distortions between e-payments and cash.
In August this year, for example, as covered by VIXIO, the BNM introduced a new ceiling on interchange fees designed to increase domestic card payment acceptance among merchants.
As of January 1, 2023, Malaysia’s interchange ceiling on domestic brand debit card payments will drop from 0.15 to 0.1 percent per transaction.
Similarly, the interchange ceiling on domestic credit card payments will drop from 1.1 percent to 0.6 percent.
The previous interchange ceiling rules were in place for five years, from 2015 to 2020. However, the BNM said its latest interchange rules will be subject to review every three years or sooner if required.
Establishing trust in e-payments
One aspect of driving and promoting the usage of e-payments is to ensure users have trust and confidence in the security of using non-cash payment methods.
To this end, and separately, the BNM has launched a new National Scam Awareness Campaign in partnership with several banking associations and other state agencies.
The Association of Banks in Malaysia said the logo and hashtag of the campaign will be carried by all banks throughout November, alongside materials to educate consumers on how to spot scammers.
The banking industry has also created a so-called "3-second rule" that encourages the public to Stop. Think. Block. after receiving an unsolicited call, message or email from an unknown financial service provider.
The campaign will also help publicise the five new fraud-fighting measures introduced by the BNM in September this year to help combat financial scams.
These include requiring banks to migrate from SMS One Time Passwords (OTP) to more secure forms of authentication for activities or transactions relating to account opening, fund transfers and payments.
Customers, meanwhile, are to be restricted to one mobile or secure device for the authentication of online banking transactions.
Highlighting the necessity of the campaign, the BNM referred to a recent survey in which it found that 37 percent of Malaysian consumers would be willing to share their bank account password or PIN number with a close friend.
“This statistic is indeed very troubling,” said BNM deputy governor Encik Marzunisham Omar. “We must take responsibility of our banking security credentials just like how we should take good care of our prized possessions.”
