Bank Negara (BN) in a statement on 29 Sept 2023 said the transaction fee for payments received by merchants via the DuitNow QR effective 1 Nov 2023 was intended to cover costs and investments needed by the industry to upkeep their payment systems, including cybersecurity and fraud prevention controls, in order to maintain the high service and security standards for payment services.
BN’s reasoning is akin to those lorry operators who transport cargo for 3rd parties who after switching from pumping Euro 2M Diesel for their engines to Euro 5 Diesel which is slightly more expensive than Euro 2M Diesel, then inform their clients that with immediate effect they need to increase their transportation charges as they are now using an improved grade of diesel for their lorries that can help and improved the maintenance and performance of the lorries when they deliver the cargo.
Upkeeping the systems including cybersecurity and fraud prevention controls are operational costs which Paynet has to incur annually and it is not a one-off capital expenditure.
It is inconceivable for the annual operating costs to be passed on to the customers.
If so, every business would have used the yearly increase in salaries for the top management as a justification to increase their fees or sales price to their customers.
In fact, under BN’s own regulations, it is a requirement for Paynet and every financial institution in the country to invest and upkeep their cybersecurity posture and fraud prevention controls constantly.
And despite that, there are still breaches happening in certain financial institutions.
BN’s position in this matter is effectively asking the public, the users, to pay for mistakes not to be made by the financial institutions.
Payments Network Malaysia Sdn Bhd (PayNet), formed in 2017, the result of the merger between Malaysian Electronic Clearing Corp Sdn Bhd (MyClear), a company wholly owned by BN and Malaysian Electronic Payment System (MEPS), the company behind automated teller machines (ATM) nationwide and presently jointly owned by BN, which has a 35% stake, and at least 11 commercial banks, including CIMB Bank, Maybank, Public Bank, RHB, Hong Leong Bank, and AmBank, controls the daily services used by Malaysians for their banking needs i.e cheque clearing, interbank online fund transfers, online bill payments such as JomPAY, as well as point-of-sale payments for shoppers through the use of debit and ATM cards.
Paynet also operates direct debit facilities for the automatic collection of payments from banks, the processing of used currency notes, security certification for chip cards and payment systems, as well as a network of ATMs that includes more than 10,000 machines nationwide.
Paynet’s response to the critics of the fee plan, saying discussions should be "premised on an accurate, correct, and fully informed understanding of the facts and how the digital payment industry actually operates is akin to excited first-time parents asking their gynaecologist every possible question about their child based on information they gleaned from the internet only to be told by the gynaecologist that they should not take everything listed on the internet as accurate but to talk to their gynaecologist who understand and can explain everything to them including scheduling when is the right time for the couple to make love to estimating the ovulation period of the female to the best copulation position to achieve maximum results.
That response was totally condescending, ignoring the important role of the ordinary rakyat who migrated to Duitnow in droves and are the main users now, helping BN achieve its objective of making the country a cashless society in the near future.
If the condescending behaviour and attitude of BN and Paynet were exhibited at the onset of the pandemic and the MCO period, they would definitely have issues in scaling up the users of Duitnow within the last 2 years.
Today, payments via QR code and e-wallet are widespread and it has become a common sight even at food stalls – but the announcement of a looming charge has rattled small businesses who are already burdened by rising prices and costs.
Paynet claimed that as products and services purchased with credit or debit cards are priced the same as cash purchases, it does not anticipate that the prices of goods and services will be affected by DuitNow QR payments after the imposition of MDR.
Duitnow are used widely by merchants and small businesses and the amount transacted is not by the thousands but generally in the tens or hundreds.
These merchants and small businesses are already struggling to cope with rising costs.
Why is BN so uncompassionate?
The MDR will not pass on to the consumers?
Who is BN kidding?
When the merchants and small businesses are already working on slim and fine margins and dropping sales, they will feel the pinch and it is inevitable they will think of ways on how to pass to the consumers.
This is survival technique 101 in the business world.
BN already burdened the ordinary rakyat with the OPR, always using academic and technical justifications in their revisions, terms which are totally lost on the ordinary rakyat, the merchants and the small businesses.
To these people, every time BN revise the OPR, it means increased costs for them.
Only business people who are out of ideas will resort to such ideas of passing down costs to their customers, a definite no-no for all entrepreneurs in today’s era.
Why don’t BN and Paynet explore the business model of Spotify?
Free downloading for all but you have to live with the constant interruptions of ads running across.
You pay subscription fees, you get an uninterrupted listening experience and you even get to choose the type of songs instead of those random playing for those who are listening to it free of charge.
In other words, zero costs for users for the basic package and pay as you use for additional and extra features in the future, users, existing or future.
This means that those who choose not to opt for the use of the additional features can continue using Duitnow with the features that are available presently and in use.
DuitNow QR shall remain free, not an affordable and cost-effective payment method with their existing features for every Malaysian.
Merchants and small businesses should only be made to pay for additional and new features which will be made optional for them.
It is the responsibility of BN as a public institution, to help in minimizing the costs of living for the ordinary rakyat and not make their life hard.
PM10 should take note of this since he always quipped that he is fighting for the poor and not listen to the advice dished out of BN whose justification was that products and services purchased with credit or debit cards are already priced the same as cash purchases and thus it do not anticipate that the prices of goods and services will be affected by DuitNow QR payments after the imposition of MDR.
Look at the 5G fiasco.
Despite PM10’s assurance that 5G will remain affordable to all, the telcos apparently pulled a fast one on you when they imposed the DNB tax on those who choose to use 5G, a situation which even caught the Minister of Communications & Digital completely flatfooted.
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