.svg)
Malaysia: Bank Negara Malaysia (BMN) Consults On Payment Cards Framework
Bank Negara Malaysia (BMN) is seeking comments on proposed rules that would update its Payment Cards Reform Framework (PCRF).
As part of the proposed changes, the bank would revise the maximum interchange fees for domestic and international card payments, adopt measures that enable merchants to manage their payment card acceptance cost and address other issues in the current payment card market.
“A key objective of this policy document is to ensure that the cost of accepting payment cards continues to remain fair and reasonable,” the consultation document says.
The PCRF was implemented in Malaysia in 2015 and, according to the central bank, “has fostered an enabling environment for greater acceptance and usage of payment cards”.
By having interchange fee ceilings it claims there has been a steady decrease in the average Merchant Discount Rate (MDR), helping to contribute to wider acceptance of payment cards among merchants.
According to the central bank, the number of point-of-sale (POS) terminals nearly tripled to 739,330 terminals in 2020, from 278,266 in 2015. During the same period, payment card transactions more than doubled to 1bn.
Under new proposals, interchange fees for domestic debit cards will fall to 0.1 percent of the value of the transactions, or RM0.37 plus 0.0001 percent of the value of the transactions, whichever is lower.
Credit cards will fall to 0.6 percent of the value of the transactions, a significant drop from the previously set 1.1 percent.
Rates for international branded debit cards appear to have increased over previous caps. The new rates will be fixed at 0.27 percent of the value of the transactions, or RM0.63 plus 0.001 percent of the value of the transactions, whichever is lower.
However, any increase to international branded debit cards is unlikely to make a significant difference to the fees paid by merchants.
The vast majority of debit cards in Malaysia (98 percent) are co-badged between the domestic and international card schemes. To protect merchants, the original PCRF has provisions, updated in the latest proposals, that allow Malaysian merchants to choose their preferred routing of locally issued co-badged debit cards. This means they can choose whether the accepted card transaction is routed across either the domestic switch or via the international scheme.
Merchant acquirers are also required to offer the choice of the merchants preferred option.
In addition, acquirers are required to ensure that a merchant who decides to set priority routing at the POS terminals or through an online payment facility displays a prominent notice at the POS to inform cardholders about the payment card network that is prioritised by the merchant for routing purposes over other payment card networks.
The consultation closes in February 2022.
United Kingdom: FCA, A More Assertive, Adaptive and Innovative Regulator
The Financial Conduct Authority (FCA) has published its own highlights reel of 2021, to promote its achievements during the year.
These achievements can be measured against the regulator’s own ambition declared in July 2021 to become a “more assertive, adaptive and innovative” regulator.
In December, the agency brought the first-ever criminal prosecution under the UK’s anti-money laundering (AML) legislation, which closed with a record £264m fine imposed on NatWest.
This is, however, only a part of the total £568m fines that the FCA levied on non-compliant firms in 2021, including £147m against Credit Suisse and £63.9m against HSBC.
To bolster innovation, in 2021, the FCA extended the availability of its regulatory sandbox, which is now open continuously throughout the year.
Under its new “use it or lose it” programme, the regulator cancelled permissions granted to 176 firms that have not carried on regulatory activity in the last 12 months.
In addition, the FCA’s call centre prevented £4m from being lost to scams, according to the regulator, secured £5m for consumers who invested in companies that were not authorised as required, and froze a further £28.5m.
United States: Airbnb Settles U.S. Case Over Sanctions Violation
Airbnb Payments has agreed to pay a $91,172 penalty to settle a case that alleges the company violated sanctions against Cuba.
According to the U.S. Treasury’s Office of Foreign Assets Control (OFAC), Airbnb Payments, which operates as a money service business (MSB) in the U.S., processed payments for guests who travelled to the Central American country for reasons that fall outside OFAC’s authorized categories.
The company also failed to keep records associated with Cuba-related transactions despite OFAC regulations.
Airbnb launched its Cuba business in April 2015, three months after the government announced regulatory changes to its Cuban sanctions.
The scaling up of its services in Cuba has outpaced Airbnb’s ability to manage the associated sanctions risks via its technology platforms and led to the “apparent” violations, OFAC said in the enforcement notice.
United States: U.S. Finds Credit Reporting System Broken
A new analysis by the Consumer Financial Protection Bureau (CFPB) finds that U.S. consumers do not get meaningful redress to their complaints concerning credit reporting.
U.S. law requires Equifax, Experian, and TransUnion to examine and respond to complaints where consumers allege there is incomplete or inaccurate information in their consumer reports.
Although in 2019, Equifax, Experian, and TransUnion reported relief in response to 25 percent of the complaints they received, this number dropped sharply in 2021 to less than 2 percent.
The CFPB looked at the issue after it received more than 700,000 complaints regarding the credit reporting companies between January 2020 and September 2021.
It has now concluded that Equifax, Experian, and TransUnion often failed to provide substantive responses, especially when they alleged the complaints were sent in by third parties.
“America’s credit reporting oligopoly has little incentive to treat consumers fairly when their credit reports have errors,” said CFPB director Rohit Chopra. “Today’s report is further evidence of the serious harms stemming from their faulty financial surveillance business model.”
Malaysia and Thailand: First Live Participants Of Two Countries Cross-Border Payments Linkage Announced
The cross-border payment linkage between Thailand and Malaysia has gone live with its first partner banks and merchant acquirer, according to a joint statement by Payments Network Malaysia Sdn Bhd (PayNet) and Thailand’s National ITMX, operators of the instant payments services DuitNow and PromptPay respectively.
First announced in June 2021, the interoperability between the two country’s QR code-based payment systems means that travellers can now make in-store or online payments at participating merchants.
Customers of Kasikornbank and Siam Commercial Bank in Thailand, and Public Bank Berhad in Malaysia, will be the first to be offered the chance to take advantage of this new linkage.
Malaysia-based Razer Merchant Services, which operates across Southeast Asia, including Thailand, will be the first merchant acquirer to participate.
According to Tan Sri Tay Ah Lek, managing director of Public Bank, as well as offering a secure and better exchange rate for consumers that use the service, the linkage will also provide greater financial inclusion across the two countries: “Businesses of all sizes, including Micro, Small and Medium Enterprises (MSMEs) can now accept payments from foreign tourists with the more efficient and secure options with cashless payments that are simple and cost-effective, lowering the barrier of doing business for MSMEs as ASEAN borders gradually reopen.”
