11 Jun - 2 min read
Bank Negara Malaysia (BNM) has revealed that e-money liabilities have grown significantly from RM0.5 billion to RM1.6 billion over the past five years. E-money is a payment instrument which stores monetary value that is paid in advance by the user to an e-money issuer, and e-money liabilities are the funds collected by these issuers from their customers.
In its e-money exposure draft published today, the central bank said that the use of e-money for payments has steadily recorded double-digit growth over the last five years, with the form of e-money progressing from traditional stored-value cards to network-based solutions such as online accounts or e-wallets.
E-money represents 33% of the total electronic payments (e-payments) in Malaysia. E-wallet transactions in particular have seen a 131% increase to RM0.6 billion in 2020 compared to RM0.3 billion in 2019.
“Therefore, given the growing prominence of e-money in the e-payments landscape, enhancements to the e-money regulatory framework are needed to ensure e-money continues to be a safe and reliable payment instrument amidst the increase in functionalities and evolvement in the enabling technology,” said BNM. “It is important to ensure the safety of the e-money funds/float and the soundness of the EMIs in order to mitigate potential risk of loss to customers, as well as, to foster public confidence in the use of e-money.”
BNM’s exposure draft sets out the central bank’s proposed requirements and guidance for e-money issuers. BNM is currently inviting written feedback on the proposals in the exposure draft, including suggestions on areas that should be clarified or elaborated further and any alternative proposals that should be considered.
(Source: The Edge Markets)