KUCHING: The reduction of online IBG payment fee to 10 sen per transaction from a fee of between 50 sen to RM2 per transaction effective May 2 this year is in line with one of the focus areas of the new Financial Sector Master Plan to drive towards electronic payment for greater economic efficiency.
According to a research analyst from MIDF Amanah Investment Bank Bhd (MIDF Research) Kelvin Ong, the reduction was an incentive to direct more individuals and businesses to shift their payment transactions from cheques to interbank giro (IBG).
“Also, to encourage the migration from cheques to IBG, with effect from April 1, 2014, a processing fee of 50sen will be charged on the issuer for each cheque issued in addition to a stamp duty of 15sen,” Ong highlighted in his research note on the sector yesterday.
“Over the past five years, transaction volume per capita for e-payments has been on a rising trend increasing from 39.8 transactions per capita in 2008 to 55.5 transactions per capita in 2012.
“Meanwhile, the use of cheques has gradually declined from 7.5 transactions per capita in 2008 to 6.9 transactions per capita in 2012. The use GIRO as e-payment has gained traction with a steady rise from 1.3 transactions per capita in 2008 to 2.4 transactions per capita in 2012.”
Ong said the reduction in IBG fee would promote a wider adoption of IBG as payment service among individuals for housing loans, credit cards, hire purchase loans and transfer of funds for other purposes.
Generally, individuals can perform IBG transactions only up to a maximum of between RM5,000 to RM10,000 per transaction per day via internet or mobile banking.
“For businesses, we expect the migration from cheques to IBG to be gradually rising. This in view that for payments via IBG for businesses, there is a maximum cap of RM500,000 per transaction,” he observed.
“Hence, for large payments exceeding RM500,000, businesses still need to transmit via RENTAS for timely payments.
“For corporations, we believe that most of the larger companies are already enjoying IBG fees at a low 50sen per transaction and are already using IBG payment services for transactions. For these companies, a lower IBG fee to 10sen will most likely not raise their volume of IBG transactions by much.”
Additionally, for businesses where the transaction payments are to vendors or suppliers, the analyst believed that some of these vendors or suppliers might still prefer payments via the non e-payment channels such as cheques.
“Overall, we expect the migration to be gradually rising and not a big leap in usage of IBG immediately overtaking the volume per capita for cheques transaction as there would still be a need to issue cheques.
The volume per capita for IBG transaction is expected to rise on a gradual basis.
“The fee income derived by banks from IBG will be lower due to the reduced fee charges.
“Nevertheless, expect that to be partially offset by rise in IBG transaction volume as well as to be offset by the processing fee of 50sen imposed on each cheque issued effective April 1, 2014,” he concluded.