Promoting Safe and Efficient Payment and Remittance Services

Making payment and money services^[1] safe, efficient and reliable for everyone

In 2025, Bank Negara Malaysia (BNM) continued to focus on making payment services safe, efficient and reliable for everyone. Our efforts are centred on three fronts:

• Expand electronic payments (e-payment) so that transactions are easier and more inclusive, while maintaining user confidence.
• Strengthen infrastructure and oversight arrangements while keeping payment systems resilient and regulations relevant as the ecosystem evolves.
• Explore new technologies to futureproof Malaysia’s payment ecosystem so that consumers and businesses can transact in a safe and efficient manner.

Sustaining greater digitalisation of payment and money services

E-payment transactions grew by 25% to 18.4 billion (2024: 14.7 billion) in 2025, as more people chose fast, convenient and secure payments for daily transactions.

On average, each Malaysian made 538 e-payments in 2025, a 25% increase from 432 in 2024^[2] (Diagram 1). Between 2022 and 2025, e-payment transactions rose by an annual average rate (CAGR) of 17%. With this, Malaysia has consistently surpassed the Financial Sector Blueprint 2022-2026 target of at least 15% CAGR in average e-payment transactions per capita. The growth in 2025 was supported by steady consumption activity. This was evident from higher retail e-payment transactions^[3] by 19% for the year to RM831 billion (2024: RM698.2 billion).

More businesses, especially smaller ones, are increasingly using e-payments, broadening adoption across the economy. Key developments include:

• Wider use of e-money. The higher average e-money transaction size of RM43 (2024: RM33) reflects growing user confidence, not just for daily spending such as transport, food and beverages, but also for higher‑value payments. These include payments for financial services such as micro-financing, money‑market fund investment and micro‑insurance/takaful.
• Steady growth in online banking. As the preferred online banking channel with a 64% market share, mobile banking continued to outpace internet banking as high smartphone penetration enables seamless and on-the-go transactions. Active mobile banking users grew by 8.7% to 25 million, while active internet banking users fell by 3.1% to 21 million compared to 2024.
• Sustained card usage. Card payments continued to be important and recorded a healthy growth. While debit card transactions’ growth almost doubled the pace of credit card transactions (20.5% versus 10.9%), the average debit card ticket size was lower by 11.5% (2025: RM69; 2024: RM78). This indicates greater acceptance of debit card for everyday lower‑value purchases against cash and other payment channels. Contactless payments also gained traction, growing by 20.3% (2025: 2 billion; 2024: 1.7 billion transactions), driven by ease and speed of use.

The acceleration in domestic e-payment adoption was also driven by greater preference for QR payments in daily transactions. DuitNow QR transaction^[4] volume doubled to three billion in 2025 (2024: 1.5 billion) mainly due to its convenience and wide merchant acceptance. As at end-2025, there are almost three million registered DuitNow QR touchpoints across Malaysia (2024: 2.6 million). A majority are small businesses who also benefit from DuitNow QR’s lower acceptance costs. Aside from lowering business costs, QR payments also increase digital access for the underserved and deliver a seamless payment experience for consumers.^[5]

With rapid e-payment adoption, use of cheques reduced further including by small businesses. In 2025, only 31.4 million cheques were issued, 21.3% lower compared to 40 million issued in 2024.

There is now a growing demand for similar convenience when paying for goods overseas or receiving money from abroad. This explained the higher cross‑border e‑payment transactions seen through our payment linkages, by both banks and non-banks (Diagram 2). This trend is also supported by more payment players offering cross‑border payment services alongside intensified promotional efforts^[6] driving greater familiarity among consumers. This, in turn, facilitates cross‑border trade, including for smaller businesses.

Digitalisation is also driving growth trends in money services business segments.

• Digital services are driving strong growth in remittances. E-remittance services by licensed remittance service providers surged by 70.1% reaching RM31.6 billion in 2025. This represents 51.8% of outward remittances. Bangladesh, Indonesia and Myanmar are the top recipient corridors for remittances in line with the large presence of migrant workers from these countries.
• Currency exchange services being supported by digital solutions. Despite the negative overall growth, currency exchange transactions undertaken by non-bank currency exchangers through digital means, rose by 29.1% to RM7.6 billion (2024: RM5.9 billion). This is due to more offering of digital solutions, including through e-payment acceptance and multi-currency prepaid cards.

Priorities in 2025

Our efforts in 2025 were directed towards three themes – expand, preserve and futureproof Malaysia’s payment ecosystem (Diagram 3).

Expand the Reach of E-payments for a More Inclusive Economy

Balancing innovation with inclusivity and affordability

E-payments support broader business participation across the economy. For small enterprises in particular, faster settlement cycles and lower acceptance costs improve cash flow management. Meanwhile, lower cash handling mitigates operational and security risks.

To make these services more accessible, we updated the interchange fee^[7] (IF) framework for debit card in 2025. The IF is a key component of the merchant discount rate (MDR). It serves as an important cost factor for businesses when deciding whether to accept digital payments using mobile wallets.^[8] The revised framework allows them to accept such payments at a lower cost. We also require card issuers to now enable the lowest-cost network option for co-badged debit cards, including via mobile wallets. Together, these measures give businesses more flexibility to route transactions through their preferred payment network and avoid costly payment methods. As for consumers, it means more choices on how they pay, including through a mobile wallet option which is more convenient.

In addition, the Government exempts service tax on fees and commissions for basic banking services, including fund transfers via DuitNow, and issuance of payment cards. This allows financial institutions to better manage transaction costs and keep digital payments affordable for consumers and businesses.

Collectively, these initiatives promote inclusivity and help accelerate Malaysia’s journey towards a modern digital economy that is less reliant on cash.

Faster, cheaper and more convenient cross-border payments

Cross-border digital payments are becoming more common for many Malaysians, whether for travel, shopping or business. In 2025, we therefore intensified regional efforts to enhance access, speed and affordability of these payments under Malaysia’s ASEAN chairmanship^[9] and BNM’s co-chairmanship^[10] of the ASEAN Working Committee on Payment and Settlement Systems (WC-PSS). The Priority Economic Deliverables (PEDs) (Diagram 4) led by BNM, sought to make paying across ASEAN as seamless as domestic transactions. It also aims to reduce costs and delays that often come with cross-border payments. Currently, there are 29 live instant payment linkages in the region (Diagram 5), reflecting growing demand for more convenient cross-border options.

During the year, phase 2 of the Malaysia-Cambodia payment linkage went live, building on existing operationally resilient and secure domestic systems. Malaysians can now pay Cambodian merchants by scanning the KHQR^[11] simply using Malaysian banking applications. This complements Phase 1, which took effect in September 2024, enabling Cambodian visitors to just use their Bakong^[12] or selected Cambodian banking applications to scan DuitNow QR in Malaysia. Spending abroad is much easier for travellers with access to QR payments at over seven million businesses across the two countries. These businesses, particularly smaller merchants, also benefit from the higher customer flows through the convenient and low‑cost QR payment channels.

Drawing from the lessons and benefits of linking instant payment systems (IPS) bilaterally, the region is coming together to develop a common global bridge through Project Nexus. Nexus intends to link IPS from India, Malaysia, the Philippines, Singapore and Thailand via a single connection, creating a network of networks that delivers faster and more affordable cross-border payments. This approach simplifies country expansion and reduces integration costs for IPS and payment service providers. In 2025, Nexus Global Payments (NGP) was set up as the scheme owner to govern the Nexus platform and prepare for its live rollout. Industry readiness also continued to be built through engagements led by BNM and PayNet, the operator of Malaysia’s IPS, the Real-time Retail Payments Platform (RPP).^[13] This includes gathering feedback on the proposed scheme rules and commercial arrangements.

For customers to enjoy a familiar and seamless experience, more financial institutions connected to the RPP will be able to support cross-border payments through the existing bilateral linkages and participation in Nexus. This approach will broaden user access to regional payment options and support Malaysia’s wider economic priorities by making it easier for individuals, businesses and travellers to transact across borders.

Preserving Public Confidence in the Use of Payment Services

As digital payments usage continues to rise in Malaysia, robust safeguards are essential for services to remain reliable. Safeguards also serve to maintain public trust and protect users from digital fraud in the payment ecosystem. In 2025, efforts focused on keeping high service availability, strengthening fraud security and achieving fair treatment of fraud victims.

Ongoing oversight of payment services

Throughout 2025, RENTAS and major retail payment platforms maintained high systems availability. This ensured that payments worked when people and businesses need them. In the isolated cases where issues arose, measures such as timely switch to back-up sites and system fixes were swiftly deployed to resolve and avoid recurring events. We also did a supervisory review on the RPP to identify further system and operational enhancements to preserve resilience, reliability and security.

To reinforce system integrity, we also did targeted reviews on the adequacy of fraud controls, information technology risk management and cybersecurity. We then took enforcement actions^[14] to address significant lapses found. These steps led to better efficiency, compliance and reduced operational risks among payment system operators and service providers. With lower risk of payment failure for customers, this means businesses face fewer interruptions at checkout and benefit from more efficient fund settlement.

We also began to use supervisory technology (SupTech) to improve detection of emerging risks and enhance work efficiency (Diagram 6). Timely insights and enhanced analytics have helped supervisors identify potential risks earlier and pre-emptively intervene before issues affect a wider group of people. This has ensured that oversight stays responsive in a more digitalised payment landscape.

Policy responses to strengthen customer protection and minimise fraud risks

During the year, we extended security standards already in place for online banking to payment cards. This raised the bar for safer card payments, thus strengthening consumer protection and reducing fraud risks. This includes shifting away from SMS-based one-time password (OTP) towards stronger authentication methods.^[15] That said, SMS OTP is still available for a limited group of users as a fallback option to manage potential exclusion risk. This means users who rely on basic or older devices can still make secure online card payments. Cardholders can also now choose their own security settings. These include the ability to disable online payment^[16] function and activate the ‘kill switch’, for instant blocking when they detect suspicious activity.

For e-money issuers (EMIs), BNM also introduced proportionate security standards to reflect their varied business models. Effective January 2025, eligible EMIs^[17] must adopt controls similar to banks. These include multi-factor authentication, single secure device authentication and the provision of a ‘kill switch’. EMIs that choose not to adopt these measures must fully bear the cost of fraud losses. This creates a strong incentive to implement enhanced controls and protects users from bearing the cost of weaker security.

To strengthen protection for fraud victims, BNM also closely looked at how banks applied the compensation framework introduced in October 2024 under the Policy Document on Ensuring Fair Treatment for Victims of Unauthorised e‑Banking Transactions (SEFT). Our review focused on case management practices and the allocation of losses for such transactions, to ensure that customers did not bear losses caused by gaps in banks’ fraud controls.^[18]

Futureproofing Key Payment Infrastructure

Malaysia’s payment systems sit behind almost every transaction we make. As the economy becomes more digitalised, the infrastructure supporting these payments must stay secure, resilient and ready for future innovation. In 2025, BNM advanced several initiatives to modernise our core payment infrastructure and explore emerging technologies (Diagram 7). The aim is for consumers and businesses to continue enjoying fast, safe and efficient payment services.

Modernising RENTAS for greater resilience and efficiency

RENTAS+^[19] went live on 29 September 2025, enabling near real-time settlement (NRTS) for RPP transactions. With RENTAS+, these transactions are settled almost instantly, shifting from the deferred net settlement^[20] (DNS) model (Diagram 8). For the public, the payment experience stays the same. However, back-end settlement is now faster and more reliable, increasing confidence that payments will settle on time. This helps reduce credit and liquidity risks for financial institutions.

It is important for our key payment infrastructure to also keep pace with global standards to support efficient cross-border payments. In 2025, Malaysia became the first country to achieve full adoption of the ISO 20022^[21] messaging standard for cross-border payments. This reflects our industry’s strong commitment to supporting the transition (Diagram 9). ISO 20022 improves payment network interoperability, hence enabling faster, more transparent and cheaper cross-border payments. For businesses, the richer structured data reduces errors and eases reconciliation, reducing manual rework and leading to better customer service.

Malaysia has fully adopted the ISO 20022 standard for cross-border payment transactions, ahead of the global compliance deadline set by SWIFT.

Strengthening shared payment infrastructure^[22]

To advance Malaysia’s payment ecosystem, access to shared payment infrastructure such as the RPP needs to remain inclusive with appropriate safeguards in place. This prevents market fragmentation, drives efficiency and innovation, and strengthens public confidence amid rising cybersecurity threats. To this end, BNM initiated a review on the Interoperable Fund Transfer Framework, which supports instant fund transfer across different financial institutions. As part of this review, BNM plans to require domestic QR code schemes^[23] to be interoperable with the national QR code standard. This would remove the display of operator‑specific QR codes, ensuring a more seamless payment experience for consumers across Malaysia.

Accelerating Central Bank Digital Currency (CBDC) exploration

BNM is committed to driving future payment innovations in Malaysia. In 2025, Project Mata Wang Ringgit, also known as Project Mawar, made notable progress in assessing how wholesale CBDC (wCBDC) and distributed ledger technology (DLT) can make settlement more efficient (Diagram 10). Key upsides include faster and more reliable interbank settlements with fewer intermediary banks involved and more efficient processing. The project examined use cases in greater detail, which will guide future efforts to modernise RENTAS, such as enabling 24/7 operations. Banks taking part in the project have contributed by identifying viable use cases based on current pain points. This project has also supported capacity building on emerging technologies, ensuring industry readiness for any potential future adoption of CBDC.

BNM also continues to work with the Bank for International Settlements Innovation Hub (BISIH) and other central banks on global initiatives^[24] (Diagram 11). All these efforts ensure Malaysia is well-positioned to take advantage of new payment innovations and transition exploratory initiatives into live implementation in the future.

Advancing digital assets and tokenisation initiatives

Digital assets and emerging technology like DLT, have drawn strong public interest. They have the potential to transform how money is stored, transferred and used across the financial system domestically and across borders. To enable safe testing of credible use cases, we created the Digital Asset Innovation Hub (DAIH)^[25] as a platform for industry players to test digital asset solutions. As of first quarter of 2026, several major institutions have been onboarded to develop use cases for tokenised money under the umbrella of DAIH. The strong industry momentum signals the growing need for regulations to also adapt in this space.

In addition, we also issued a Discussion Paper on Asset Tokenisation, outlining high level principles and priority use cases to guide industry focus areas. This is supported by a dedicated industry working group (IWG) for structured dialogue.

BNM recognises that building a sustainable digital asset ecosystem requires strong partnership between public and private sectors. To achieve this, we also worked closely with the Securities Commission Malaysia^[26] and other agencies to align policies, including through the Digital Assets and Artificial Intelligence Advisory Council chaired by the Prime Minister. In addition, BNM brought together financial institutions and digital asset players for structured dialogue, to ensure mutual understanding on risk management practices and build trust.

These steps will help Malaysia build a digital economy that is safe, vibrant and supports responsible innovation while maintaining monetary and financial stability.^[27]

Going Forward

In 2026, BNM will continue to pursue efforts that ensure payment and money services are secure and reliable for consumers and businesses. Efforts to expand digital payment adoption across all segments of society will be intensified. At the same time, strengthening oversight and fraud prevention to protect users will remain a priority. This includes closer cross-sector collaboration and enhanced cross-border safeguards to counter increasingly sophisticated scams. These measures will ensure users can transact securely and support confidence in Malaysia’s digital economy.

In line with growing global interest towards a tokenised economy, BNM will continue to advance work on asset tokenisation and digital money including CBDC, tokenised deposits and Ringgit stablecoins. This work will be undertaken with the intention to establish a clear regulatory framework. This approach provides industry certainty while safeguarding financial stability and consumer protection. Together, these efforts will position Malaysia as a trusted and forward-looking nation for responsible digital finance innovation. Ultimately, this will translate into real economic gains and support Malaysia’s broader economic transformation.

Notes

^[1] Namely remittance, currency exchange and wholesale currency services. Wholesale currency refers to the buying and selling of foreign currency with licensed commercial banks, Islamic banks, investment banks or licensed money services business (MSB) operators, as well as the import and export of foreign currency notes.

^[2] E-payment transactions per capita for 2024 have been revised from the number published in BNM’s Annual Report 2024 due to an update in the population data used in the computation.

^[3] Refers to e-payment transactions made via payment cards, e-money purchase transactions, Financial Process Exchange (FPX) and DuitNow Online Banking/Wallets (OBW) transactions. FPX and DuitNow OBW is commonly used for e-commerce purchases.

^[4] This includes DuitNow QR transactions conducted by individuals and merchants, encompassing both banks and non-bank financial institutions.

^[5] Refer to feature article on DuitNow QR: Fostering Inclusive Digital Payments (https://www.bnm.gov.my/documents/20124/12142010/ar2023_en_box6.pdf) in Annual Report 2023 for more details on the cost-effective setup of DuitNow QR.

^[6] This refers to social media and on‑the-ground awareness campaigns carried out by PayNet together with banks, e‑money issuers and acquirers.

^[7] An interchange fee is a charge between banks for processing card payments, which influences the cost for merchants to accept card payments.

^[8] Examples of mobile wallets include Apple Pay, Samsung Pay and Google Pay.

^[9] Please refer to the feature article titled ‘Malaysia’s 2025 ASEAN/ASEAN+3 Chairmanship: Advancing Inclusive and Sustainable Economic Growth for ASEAN and Malaysia’.

^[10] Together with Brunei Darussalam Central Bank as co-chairperson for WC-PSS.

^[11] Khmer QR (KHQR) is a standardised QR code payment system in Cambodia, designed to facilitate cashless transactions and enhance interoperability among different banks and payment service providers.

^[12] Bakong is Cambodia’s all-in-one mobile payment and banking app, launched by the National Bank of Cambodia. It allows users to make payments, transfer money and access various financial services through a single platform.

^[13] RPP is the shared payment infrastructure developed and established by PayNet which facilitates instant payments and collections using easily remembered proxies or by account numbers.

^[14] Refer to chapter on ʽPromoting Financial Stabilityʼ in BNM’s Annual Report 2025 for more details on enforcement actions taken.

^[15] This is to address SMS-based vulnerabilities such as exposure to SIM‑swap, malware and interception risks.

^[16] Also refers to card-not-present transactions.

^[17] EMIs are grouped into eligible EMIs and standard EMIs. Eligible EMIs are those that meet BNM’s criteria for significant market presence and are subject to stronger safeguards. All others are considered standard EMIs.

^[18] Refer to feature article titled ‘Fraud Resolution: Building Trust through Shared Accountability’ in BNM’s Annual Report 2025 for more details on the implementation.

^[19] RENTAS+ builds on the existing RENTAS infrastructure using modern cloud technology. It enables interbank fund transfer and settlement in RENTAS on a 24 by 7 basis throughout the year. To support round the clock settlement, financial institutions have access to a newly-introduced 24/7 automatic liquidity facility using repurchase agreements (repo) and sell and buy back agreements (SBBA).

^[20] RENTAS+ settles each retail payment transaction individually in real time. Meanwhile, the DNS model groups multiple transactions over a pre-determined period and calculates each participant’s net settlement position. At the end of each settlement cycle, only the net amount is settled.

^[21] ISO 20022 is an international messaging standard for the financial industry with enhanced data content and structured messaging formats. For more information, please refer to BNM’s Annual Report 2020 and the introductory video at (https://www.iso20022.org/about-iso-20022).

^[22] Shared payment infrastructure serves as an interoperable network connecting bank accounts and non-bank e-money accounts for both account-to-account fund transfers as well as payments to merchants. It has enabled the industry to collaborate by pooling resources and sharing costs, while competing at the product level at the same time to better serve end-users, such as consumers and merchants.

^[23] This requirement will only be applicable to banks and eligible EMIs.

^[24] Project Rialto was the most recently completed project with the BISIH Eurosystem and Singapore Centres. Four central banks namely Banque de France, the Bank of Italy, the Monetary Authority of Singapore and BNM participated in this project. The Project Rialto technical report was released on 10 December 2025 and is accessible via (https://www.bis.org/publ/othp106.htm).

^[25] Launched by BNM’s Digital Currency Hub, DAIH has received strong interest since its launch in June 2025. The hub has engaged a wide variety of players including domestic and international players across the financial, fintech and non-financial sectors. Admission of participants into DAIH will be guided by the principle of responsible innovation, which includes credible value proposition and track record of sound governance and risk management, among others.

^[26] The Securities Commission Malaysia regulates the issuance, trading and custody of digital assets in Malaysia through the 2019 Prescription Order and additional guidelines covering Digital Asset Exchanges (DAX), Initial Exchange Offerings (IEO) and Digital Asset Custodians.

^[27] Digital asset innovation, when accompanied by sound risk controls and an appropriate regulatory framework, can be scaled safely to minimise any foreign currency pressures and contagion risks while ensuring that payment arrangements remain resilient.