Reference is made to the letter-to-editor titled “Banks are burdening customers” published in The Star on 25 September 2015.

The Association of Banks in Malaysia (ABM) would like to clarify that the cheque processing fee of 50 sen which was imposed with effect from 2 January 2015 was implemented with the aim of encouraging behavioural change in the move towards electronic payment (e-payment) as the preferred payment method.

To promote the national agenda of migration to e-payment, Bank Negara Malaysia announced a new pricing strategy for payment services in March 2013. The fee for fund transfers using Inter-Bank GIRO (IBG) performed via internet banking and mobile banking was reduced to a maximum of 10 sen per transaction with effect from 2 May 2013. Transfers done via IBG are fast as there are five clearing windows in a day, and payments made before 5pm will be credited to the recipient’s account on the same business day.

In June this year, the fee for Instant Transfer (previously known as Interbank Funds Transfer or “IBFT”) which allows funds to be transferred to an account in another bank immediately on a real time basis was lowered from RM2 to 50 sen. Additionally, the fee for Instant Transfers done via online banking or mobile banking will be waived from 1 October to 31 December 2015.

The reduction in both the IBG and Instant Transfer fees is to encourage banking customers, be they members of the public or businesses, to use e-payment channels instead of cheques.

All this time, banks have been fully subsidizing the production cost of cheques which is about RM3 per cheque. The production costs include, but are not limited to, the following:-

• cost of printing the cheques (third party cost);
• fee imposed by MyClear for the e-SPICK clearing services (third party cost);
• manpower and operational costs incurred to collect, scan and process the cheques for payment (internal and third party cost); and
• information technology (hardware and software) cost (internal and third party cost).
• The imposition of the cheque processing fee of 50 sen would barely cover the production costs. Given that the volume of cheques processed is targeted to reduce to 100 million by the year 2020, banks would be receiving approximately RM50million in processing fee income (all things being equal) but would still need to incur an estimated RM300million in cost.

In addition, an e-Payment Incentive Fund (ePIF) framework has been set-up to coincide with the implementation of the cheque processing fee. Under the ePIF framework, banks would channel the cheque processing fee collected from their customers into a fund to be used for infrastructure development and to provide incentives to their customers to adopt e-payments. In other words, the cheque processing fee goes back to consumers for their benefit.

The banking community is committed to assist consumers to adopt e-payments. Most banks have assigned staff ‘ambassadors’ at the banking halls to help customers to familiarize themselves with the e-payment channels. We would also encourage bank customers to approach their banks for information regarding these services as banks would be most willing to guide them.

To facilitate convenient access to internet banking, banks have deployed internet kiosks or such similar services at their bank branches and offer IBG/IBFT services at selected automated teller machines (ATMs).

There is a need for a conscientious and concerted effort to promote e-payments in tandem with Malaysia’s economic growth as research has suggested that successful migration to e-payments can save the country in terms of costs (of about 1% of GDP annually). In the long run, making payments or fund transfers via IBG and IBFT will prove to be the faster, more affordable, convenient and secured choice.

For further enquires, members of the public are welcomed to contact us at our ABMConnect hotline by dialing 1-300-88-9980, or through eABMConnect by logging on to our website, www.abm.org.my.