By BERNAMA
Bank Negara Malaysia (BNM) today issued the payment card reform framework as a standard under the Financial Services Act 2013 and the Islamic Financial Services Act 2013.
The central bank said the framework could foster an efficient, transparent and competitive payment card industry in the country.
“The framework incorporates the proposals set out in the concept paper issued on Oct 10, taking into account the feedback received during the consultation process,” BNM said in a statement.
The framework would ensure that the cost of accepting payment cards was fair and reasonable through the establishment of an objective and transparent mechanism for the reimbursement of fees among payment card network participants, it said.
Under the framework, ceilings would be imposed on interchange fees payable by the acquiring banks to the payment card issuing banks.
As the interchange fees are reflected in the merchant discount rates (MDRs) paid by merchants, the ceilings would address the risk of escalation in the MDRs due to indiscriminate increases in interchange fees.
As a general principle, the interchange fee ceilings for debit card based on its eligible cost components are much lower than that of credit card.
“This principle makes the debit card a more cost-effective payment instrument to facilitate greater card acceptance especially among small merchants,” BNM said.
A series of measures would also be introduced, designed to address other distortions in the payment card market, in order to promote greater usage and acceptance of cost-effective payment cards, it said.
Such measures would improve the price signals and empower merchants to accept cost-effective payment cards.
BNM said the framework would be implemented in phases commencing from Jan 15, 2015, with the majority of the measures including the interchange fee ceilings, becoming effective on July 1, 2015.
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