Payment process by major technology companies (Big Tech) in Malaysia has grown by about 170 per cent since the pandemic began, due to its lower complexity, universal demand and lower trust barriers, said Bank Negara Malaysia Governor Datuk Nor Shamsiah Mohd Yunus.
She said developmental policies have also eased the entry of Big Tech payment process, including policies that foster interoperability through common national infrastructure and an open entry policy for new entrants in the payment sphere.
“The Big Tech payment process has outpaced the overall growth in e-payments of about 20 per cent. However, in terms of absolute value, it only accounts for a marginal portion of the overall value of e-payments at less than 0.2 per cent.
“Online banking remains the dominant method of transferring value digitally in Malaysia, while beyond payment, the extent of Big Tech disruption in other financial services is still limited,” she said during the virtual Bank for International Settlements’ (BIS) ‘Regulating Big Tech Conference’ recently.
“We observe that the high level of financial inclusion and a core of strong and competitive incumbent financial institutions have so far narrowed the disruption potential of Big Techs,” she said.
She added that with the emergence of new business models, the central bank has found itself having to respond to policy disruptions, which is compounded when it involves unclear or overlapping regulatory parameters across authorities.
“This calls for the central bank to act as an advocate for holistic policy responses by broader public administration.
“For Malaysia, this includes the provision of services which transcend regulatory boundaries such as digital assets, which calls for coordination across different authorities, so we have worked closely with the Securities Commission of Malaysia on this to clarify respective areas of oversight based on use cases.
“This has promoted a more pervasive approach to regulating digital assets with a joint arrangement to signal a united policy stance in managing risk from various users of digital assets,” said Nor Shamsiah.
She also noted the emergence of business models outside the existing regulatory scope that may compete with conventional banking, particularly the ‘buy now, pay later’ policy in retail lending.
“What we have done is we have advocated the introduction of Consumer Credit Act, because the growth of this outside the banking sector can harm financial consumers, thus we have to ensure that there is protection and fair treatment of borrowers,” she said. — BERNAMA
