KUALA LUMPUR, September 29 – On September 26, 2023, various online and mainstream media outlets reported on a local banking institution’s announcement concerning the impending imposition of transaction fees for DuitNow QR payments and transfers made with credit cards, set to take effect on October 1, 2023. The reports also mentioned that some banks seemed unaware of this development.
Payments Network Malaysia Sdn Bhd (PayNet), the operator of DuitNow QR, has deemed it necessary to issue this comprehensive clarification to ensure the accurate and clear understanding of the facts surrounding this matter. While concerns have arisen regarding the potential impact of these fees on merchants and the pricing of goods and services, it is crucial to address several points of confusion:
Two Distinct E-Payment Types: The reports inaccurately conflated two separate types of electronic payments:
- E-Payments to Merchants: This category pertains to payments made by customers to any merchant. Typically, it incurs a merchant discount rate (MDR), which is a fee charged based on a percentage of the payment transaction value. The merchant receives the payment after deducting the MDR. Currently, both debit and credit card payments are subject to MDRs, while QR payments enjoy an MDR waiver. However, commencing on October 1, 2023, this MDR waiver for DuitNow QR payments will no longer apply.
- RM0.50 Fee for Fund Transfers: The RM0.50 fee, mentioned in the reports for transactions exceeding RM5,000, applies exclusively to peer-to-peer fund transfers between personal QR codes. This fee is unrelated to the first type of QR payments made to merchants. Importantly, under no circumstances will both fees be imposed for a single transaction.
For payments involving merchants (the first category), the collected MDR will be divided between PayNet and the relevant bank or third-party acquirer. This allocation serves to maintain the network and cover the costs incurred by banks and third-party acquirers when onboarding merchants to provide this valuable service. The waiver of MDR for QR payments was initially introduced to encourage QR payment adoption during its introductory period in 2019. This waiver was later extended due to the outbreak of COVID-19. Therefore, the imposition of MDR on October 1, 2023, marks the conclusion of a waiver period that was originally intended to end over nine months ago.
PayNet intends to establish a reserve fund using the MDRs collected. This fund aims to incentivize acquirers not to charge smaller businesses. While PayNet cannot dictate market practices, several banks and third-party acquirers plan to either defer the imposition of MDR or absorb it for smaller businesses. Merchants are encouraged to verify this with their respective banks or third-party acquirers. This fee pertains solely to fund transfers exceeding RM5,000 using personal DuitNow QRs.
It is erroneous to state that this RM0.50 charge applies to payments made to merchants. Additionally, it is incorrect to claim that MDRs are levied on fund transfers using personal QRs. Concerns regarding MDRs being passed on to consumers should be clarified. Payments made with credit and debit cards are already subject to MDR. Consequently, the prices of products and services purchased with credit or debit cards are equivalent to those of cash transactions. As a result, we do not anticipate any impact on the prices of goods and services purchased using DuitNow QR after the imposition of MDR.
Addressing the perception that cash transactions are entirely free, PayNet wishes to emphasize that a study conducted by Roubini Thoughtlab in 2018 debunked this belief. The study indicated that the benefits of going cashless significantly outweigh the associated costs for businesses. Over a 15-year period (2017-2032), cumulative net benefits of USD4.2 billion are expected, stemming from savings derived from reduced paperwork and the advantages of e-payments.
Including increased interest earnings, elimination of manual reconciliation, reduction in losses related to shortfalls, decreased headcount, and time savings associated with cash handling. In conclusion, PayNet underscores the importance of accurate, well-informed comprehension when discussing this matter or engaging in any dialogue regarding the digital payment industry. Clarity on these facts provides essential context and promotes a more precise understanding.
