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Treasury & Capital Markets
Malaysia accelerates migration to e-payments
Bank Negara Malaysia, the central bank, on May 22 announced the merger of Malaysian Electronic Clearing Corporation (MyClear) and Malaysian Electronic Payment System (MEPS) to form Payments Network Malaysia or PayNet.
The Asset 23 May 2017

Bank Negara Malaysia, the central bank, on May 22 announced the merger of Malaysian Electronic Clearing Corporation (MyClear) and Malaysian Electronic Payment System (MEPS) to form Payments Network Malaysia or PayNet.

PayNet will be the operator of shared payments infrastructures for Malaysia. The formation of PayNet is aligned with Bank Negara’s efforts to ensure Malaysia’s payments infrastructures are competitive, efficient, open and innovative to accelerate the country’s migration to electronic payments and to meet the existing and future needs of the economy.

“The merged entity will assume a key role in enhancing Malaysia’s growth potential through the provision of world-class payment systems that are competitive, efficient, open and innovative,” says Bank Negara Governor Muhammad bin Ibrahim in a statement. “As a shared utility, PayNet will operate with a public interest objective to support and develop safe, reliable and efficient payment systems in Malaysia.” PayNet will be jointly owned by Bank Negara and the financial industry.

The merger will increase synergies and efficiencies through coordinated strategies for the development of shared payment infrastructures under a single entity that will improve the cost-effectiveness, inclusiveness and the value proposition of e-payment services in Malaysia.

To facilitate network expansion and drive innovation in payment services, PayNet will enable open and fair access to its payment infrastructures to both banks and eligible non-bank entities. In the immediate term, the infrastructure projects that will be spearheaded by PayNet include the establishment of a national addressing database to facilitate payments to recipients using their mobile phone numbers or National Registration Identity Card numbers. PayNet will also promote the acceptance of MyDebit cards as a low-cost alternative for merchants to lessen the need for cash in retail transactions.

PayNet will operate Malaysia’s key payment systems previously operated by MyClear and MEPS. These include the Real Time Electronic Transfer of Funds and Securities System that facilitates the transfer and settlement of high-value interbank payments and securities transactions, and various retail payment and clearing systems, including the shared ATM network, interbank GIRO, instant transfer, JomPAY, financial process exchange, direct debit, domestic debit card network (MyDebit), and the cheque clearing system.

Established in 2008, MyClear is a wholly-owned subsidiary of Bank Negara. It builds and operates payment systems and financial market infrastructures that safely, reliably and efficiently enable the functioning and development of Malaysia’s financial system as well as the economy as a whole.

MEPS is an interbank payment system operator in Malaysia established in 1996. As a payment consortium owned by 11 domestic banks, MEPS provides the shared ATM network services and real-time funds transfer service (instant transfer).

Photo courtesy of MyClear.

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