Bank Negara Malaysia suggests ATM card for ASEAN

Folks,

This is interesting. In a recent speech by Bank Negara Malaysia deputy governor Dato' Muhammad bin Ibrahim (you can find the link here), he hopes for a one bank card for ASEAN.

“… I hope that one day we would have one card for ASEAN, where ATM cards issued by any bank in the ASEAN countries can be used to transact within the ASEAN region.”

Such a statement or rather an opinion is viewed quite strong, more so if it comes from an authoritative figure.

I think this would benefit us all. But the issue that needs to be tackled first, should we wish to proceed in having universal ASEAN bank card, would be security.

Maybe this idea would come to fruition one day.

I don’t think this idea will be impossible–in fact, it should not be discounted at all–especially the Asean Economic Community set to materialize next year.

Some key points which could also be found in his speech include:-

1. Some staggering 2.5 billion people across the world are still unbanked – that is, they have no banking account! Oh my.
2. The central bank wish to see that the number of cheques processed per year be reduced to 100 million by 2020 from 207 million in 2010. 
3. The central bank targets the per capital e-payment transaction from 43 in 2010 to 200 by 2020, and the per capital debit transactions from 0.6 in 2010 to 30 by 2020. I think this is a good move. Everyone is rapidly using internet (e-payment) to pay their bills, purchase things and perform many other transactions. Thus, it is heartening to see the target of 30 by 2020.
4. The debit card penetration is quite high, with 19.2 million “active” cards-in circulation, which is almost equal to the bankable population of 20.4 million adults. The word active here refers to at least one transaction via debit card per month.
5. Meanwhile, there are 5.5 million active credit cards, with per capita transaction of 11.3 last year.
6. What this means is that there are six credit card transactions for every one debit card transaction.
7. As at end-2013, Malaysia has a high mobile phone penetration of 144 per 100 inhabitants. As for broadband penetration, there are 67 per 100 households.
8. As at end-May 2014, there are 2,935 bank branches and 5,802 agents under the agent banking network nationwide. 
9. As for financial inclusion, he said that it is a “global agenda to ensure that all segments of the society, including the most vulnerable groups, have access and usage of quality and affordable financial services.” The focus to drive financial inclusion to the next level, via the use of e-payments include:-

• Correcting price distortions and promoting competition – Bank Negara has introduced “pricing reformm network”, where the price of Inter-Bank Giro (IBG) and cheques are aligned closer to their cost of production. For example, Bank Negara Malaysia has reduced the charge fee for online transaction from RM2 previously to 10 sen currently. This saw a significant improvement, where the IBG transaction volume grew at a higher rate of 45.6% on a year-on-year basis  for the first half of 2014 (1H14) compared to 12.4% for the same period last year. Likewise, cheques declined at a faster pace of 9.8% or 10 million cheques in 1H14 compared to 2% or 2 million cheques in 1H13. That is a lot of improvement, folks.

• Development and sharing of infrastructure investments -- the importance of collective industry efforts to develop and share infrastructure cannot be emphasised enough, he said. Infrastructure development is very expensive and the banking industry ought to share the required investments. It should not be used as a competitive tool but rather as an enabler that would promote modernisation of the payment system.

• Strengthening transaction security -- according to Muhammad, Malaysia is the first country in the Asia Pacific region to migrate from magnetic strip cards to chip-based payment cards. This transition, he said, was completed in 2005 despite the initial resistance by the industry. It had successfully eradicated cases of fraudulent skimming or counterfeiting of payment cards. The investment cost of RM200 million was recovered within two and a half years from fraud avoidance.

• Consumer protection and education

Have a read of his speech folks (click here).
I enjoyed it!