In brief
Bank Negara Malaysia (BNM) has proposed the introduction of the Interoperable Fund Transfer Framework ("New Framework") that is intended to replace the existing Interoperable Credit Transfer Framework (issued by Bank Negara Malaysia (BNM) on 23 December 2019). The New Framework is intended to govern and further promote the interoperability of fund transfer services in Malaysia, and facilitate collaborative competition between banks and non-bank payment service providers through fair and greater access to shared payment infrastructure.
The New Framework is not yet in force; an exposure draft ("Exposure Draft") of it has been made available. Comments to the exposure draft can be submitted to BNM by 30 September 2025.
Key proposals
Recognising that the existing shared payment infrastructure has accelerated the adoption of electronic payments in Malaysia, the Exposure Draft aims to expand the reach of the New Framework whilst safeguarding the infrastructure's operational resilience, integrity and stability for public use. To do so, the Exposure Draft raises key proposals, including:
- Cross-border fund transfer services will be in-scope: The use cases for shared payment infrastructure will include cross-border fund transfer services. With this expansion, users will be able to make instantaneous overseas payment transactions, i.e., akin to domestic payments.
- More financial services providers will have access to the shared payment infrastructure: The shared payment infrastructure will be made available to financial institutions or entities offering ancillary services that are not regulated by BNM. This offers the potential to accelerate network effects, drive greater efficiency and innovation in the payment ecosystem.
- Operators of a shared payment infrastructure will need to enhance its risk management framework: Shared payment infrastructure operators will need to maintain and allocate sufficient resources and appropriately skilled personnel to monitor the use of the infrastructure.
Next steps
Applicable Persons who may be affected by the amendments under the Exposure Draft, including being subject to additional obligations, should consider the impact of the proposals under the Exposure Draft and provide feedback to BNM by 30 September 2025.
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Eliza Chow, Associate, contributed to this legal update.
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