Bank Negara yet to decide on action if PAY & PAY deadline missed

KUALA LUMPUR: Bank Negara Malaysia (BNM) has yet to consider taking action on banks if the year-end deadline of migrating to personal identification number-enabled (PIN-enabled) payment cards and point-of-sale (POS) terminals is not met, given the slow migration process which stood at 45% for payment cards and 38% for POS terminals as at end-September 2016.
With only 1½ months left to the Dec 31, 2016 deadline, BNM payment systems policy department director Tan Nyat Chuan said it is a matter best left to the individual banks to manage, as BNM provided ample notice to the industry and rescheduled the deadline from 2015 to 2017.
SunBiz on Oct 31, 2016 reported that it will be a challenge for the target of PIN-based payment cards adoption to be met based on current progress.
“From the part of a regulator, we’ve given sufficient notice to the industry. These are challenges best left to the individual banks to manage. It’s their own effort to manage their merchants and cardholders. Some banks have been able to do it well ahead, some have not,” he told a media briefing here on the migration to PIN-based payment cards here yesterday.
Tan said BNM reserves the right to take action on any particular bank which is seen to have not made sufficient effort, but that will be on a case-by-case basis.
“We’ll assess the non-compliance and we will look at the specific cases and make a decision internally as to whether or not we will take formal action on banks that have not complied with our deadlines,” said Tan.
There are a total of 25 million cards to be replaced in Malaysia, which constitutes 7.6 million credit cards and 17.8 million debit cards. Of this, 71% of credit cards have been migrated to PIN-enabled cards, while 34% of debit cards have been migrated as at end-September.
The share of debit card and credit card transactions is at 21:79 for the first nine months of 2016.
The industry has committed to invest RM1.1 billion over six years (2015 to 2020) to support payment card infrastructure enhancement and expansion. This comprises enhancing the security of payment card transactions through migration to PIN-based cards by Jan 1, 2017; enhancing the efficiency and convenience of payment card transactions through the rollout of contactless debit cards by Jan 1, 2018 and the expansion of POS terminals to 800,000 POS terminals by 2020.