The framework would enhance consumer protection and confidence in the use credit transfer services. Focus on solving the last mile obstacles to enhance migration to e-payments To remain relevant, it is important for all stakeholders to step up their game to drive innovation and new use cases to accelerate the displacement of cash and cheques. PayNet, as the operator of shared payment infrastructure, will facilitate the pooling of resources to develop innovative use cases to meet the evolving needs of end-users. For this to happen, PayNet might need to establish an innovation lab and publish open APIs to leverage on the creativity, resourcefulness and innovativeness of the fintech community. Banks and non-bank players should focus on solving last mile obstacles by alleviating the ‘pain points’ faced by consumers and businesses. Subject to the observance of data protection laws, market players should mine customers’ data to develop innovative solutions and deliver superior customer experience. Customers can now look for digital solutions that enrich their quality of life. This may necessitate entities to forge strategic alliances to deliver innovative services leveraging on each other’s competitive advantages. Equally important, are efforts to enhance cyber security and promote greater public awareness of the security features and safety tips to mitigate fraud. Bank Negara Malaysia will work with the payment industry to take preemptive actions to protect the security of customer funds and financial market infrastructures. Conclusion In our quest to engage in the digital economy, migration to e-payments is a critical component.

The reform measures in the Payment Card Reform Framework (PCRF) implemented since 2015 have enhanced transparency and competition, bringing about a continued decline in the average merchant discount rates (or MDR). Merchants have benefited from lower cost of accepting card payments, with an estimated cost savings of about RM422.4 million from 2015 to September this year. Consequently, the annual growth of POS terminals has more than doubled from about 6.8% for the period between 2011 and 2014, to 17% for the period between 2015 and 2017. Key trends shaping our payment landscape today Since the Payment Forum in 2015, many developments have taken place in the payment landscape both domestically and internationally. Firstly, society has become increasingly digital and connected, driven by the Internet and mobile revolution. For a population of 32.1 million in Malaysia, there are 42.8 million mobile phone subscriptions while smartphone penetration stands at 70% and is increasing. Secondly, payment technology has become more advanced, scalable and increasingly low-cost. For instance, innovations in the area of merchant acceptance has lowered the cost for merchants to embrace electronic payments through the use of Quick Response (QR) codes. Likewise, the advancements in biometric and tokenisation technologies and the shift towards greater publication of Application Programming Interfaces have enhanced the ability of payment service providers to develop new use cases and deliver superior customer experience. Thirdly, the market players in our payment landscape have become more abundant, diverse and increasingly non-traditional.