Future-proofing the payments landscape will be key moving forward Finally, let me turn to the third key priority for payment infrastructures to be future-proofed. Payment systems of the future must be inclusive and able to accommodate the speed of change for implementing new solutions at scale. In this regard, we have achieved a key milestone with the launch of the Real-time Retail Payments Platform (RPP) last year. It is designed to be more scalable, flexible and open to support new use cases such as Proxy Payments, Request-to-Pay, e-Mandates and services to support more seamless customer onboarding processes. The RPP represents the first step of a multi-year journey to future-proof our retail payment infrastructure. Additionally, the Bank is currently embarking on a study to identify possible opportunities to renew or enhance Malaysia’s large value payment system, RENTAS, to support the emerging needs of the economy. Across the board, four key elements will be important. The first is interoperability which can enhance competition and drive greater efficiency through wider network reach and economies of scale. Last year, we established the Interoperable Credit Transfer Framework that facilitates fair and open access for banks and non-banks to shared payment infrastructures such as the RPP. 3/4  BIS central bankers' speeches  The second element is standardisation, which can improve efficiency and foster the development of new services. For instance, adoption of ISO20022 may provide opportunities for innovations, enhanced fraud and financial crime detection, and improved straight-through processing.

Greater scope to enhance inclusivity and quality of e-payment adoption The first priority is to improve the quality of our e-payment migration to be more inclusive, broadbased and sustainable. The good progress so far means that Malaysia has a solid foundation for more widespread adoption of e-payments. E-payments are increasingly prevalent, with adoption picking up across a wide range of use cases. A wider network of merchants is also increasingly open to accepting e-payments as a possible driver of efficiency gains and revenue growth. Importantly, these encouraging developments have been contributed, in part, by the market reforms and incentive structures implemented since 2013. These measures have corrected market distortions and facilitated the pooling of industry resources to continuously enhance the payment infrastructure and services. Nonetheless, there are opportunities for more inclusive and broad-based adoption. Studies have shown that cash usage is still prevalent with more than 80% of Malaysians reportedly using cash in a majority of their everyday spend such as F&B, groceries and fuel. E-payment adoption is also uneven across geolocation and is largely concentrated in the urban centres. This calls for greater efforts in two key areas to address such market gaps. The first key area is to significantly expand merchant acceptance, with a focus on lower-tier merchants. E-payment acceptance points are not yet ubiquitous, especially among microenterprises that are frequented by many Malaysians, such as wet markets, night markets and hawker stalls. In this regard, solutions that are ‘infrastructure-light’ could go a long way in boosting e-payment acceptance among micro-enterprises who are cost-sensitive.