MyClear wants 5,000 billers for national e-payment scheme by 2020

KUALA LUMPUR: Malaysian Electronic Clearing Corp Sdn Bhd (MyClear), a subsidiary of Bank Negara Malaysia (BNM) is targeting to register 5,000 billers for the national electronic payment (e-payment) scheme known as JomPAY by 2020, in line with the central bank's plan to reduce country's reliance on cash payment.

JomPAY provides access for the consumers to make bill payments using the Internet and mobile banking channels through 42 participating banks across Malaysia, including CIMB Bank Bhd, Malayan Banking Bhd and HSBC Bank Malaysia Bhd. It allows the businesses to collect payments via the participating banks by signing up with only one bank.

"The introduction of JomPAY will complement the existing measures to accelerate the country's migration to e-payments," BNM's deputy governor Datuk Muhammad Ibrahim said at the JomPAY's official launch yesterday.

"As payments represent an indispensable activity for both individuals and businesses, increasing payment efficiency through the adoption of e-payments will improve productivity and reduce the cost of transactions," he added, noting bill payments made via electronic channels are still relatively low at 2.4 transactions per capita in 2014.

Muhammad noted the Interbank GIRO (IBG) transactions has increased by 36% last year, compared with 19% in 2013, while cheque usage declined at a rate of 10% from 3% in the previous year.

However, he said bill payments in Malaysia are still predominantly made via cash or cheques, mainly due to the country's online bill payments model, where merchants need to maintain multiple banking relationships in order to receive bill payments from customers.

"Merchants, especially small and medium enterprises (SMEs), find it difficult and costly to maintain multiple banking relationships. As a result, only about 1,000 merchants are currently registered to accept online bill payments via the individual banks' proprietary bill payments system."

Therefore, he said banks in collaboration with MyClear should take efforts to expand the number of businesses accepting JomPAY, especially the under-penetrated sectors of SMEs and the federal and state government agencies.

He added that to reduce the usage of paper-based bill payments over-the-counter (OTC), the banking industry should deploy more payment card terminals at merchant outlets, government counters and at the premises of collecting agents such as bank branches and post offices.

"With a high penetration of 45 million debit cards for a population of 30 million, Malaysians have the option of using their debit cards to pay bills OTC, thus lessening the need to carry cash," he said, noting the central bank plans to expand the payment card acceptance network from current 240,000 terminals to 800,000 terminals within 6 years.

"These measures, if implemented successfully, will lessen the need for cash payments. While this target seems ambitious, we can achieve this milestone with collective efforts by all," he added.

Meanwhile, MyClear's managing director Peter Schiesser said currently about 116 biller codes has registered in JomPAY since its pilot operations four months ago.

"I am optimistic that we can do more than that. It will take a few years to round-up, but I think it will move quicker than we expected," said Peter, who noted currently Malaysia has 17 million Internet Banking subscribers, which represents 56% penetration of total population.

MyClear builds and operates world-class payment systems and financial market infrastructures that enable the functioning and development of Malaysia's financial system as well as the economy as a whole.

Source : The Sun Daily / 10 April 2015