Bank Negara Malaysia (BNM) has issued the payment card reform framework as a standard under the Financial Services Act 2013 and the Islamic Financial Services Act 2013 to encourage an efficient, transparent and competitive payment card industry in the country.
The framework will ensure fair cost of accepting payment cards by establishing a cap on interchange fees, fees paid by merchants to card issuing banks, for payment card transactions.
Under the guidelines, domestic and international debit cards and international prepaid cards will have zero interchange fee charged between 2015 and 2020 controlling the escalation of merchant discount rates (MDRs).
Interchange fees for credit card will have a ceiling of 1.1% from 2015 to 2020 and 0.48% from 2021 onwards.
The measure will follow a series of other measures to be implemented in phases from 1 January 2015 intended to address other distortions in the payment card market thereby promoting greater usage and acceptance of cost-effective payment cards.
"As payment card transactions increase, banks, in general, would benefit from cost savings and efficiency gains through a reduction in their cash handling cost," BNM said in a statement.