Payment Cards in Malaysia : Redefining the Way to Pay

Mr. Perry Ong Chairman, National Cards Group (NCG)

Payment System Forum and Exhibition 2014 Sasana Kijang, Kuala Lumpur

27 November 2014

Source : EvolutionOfPayments - Intuit

• Malaysia – The Evolution

• Vision 2020 – The Revolution

• Roles and Opportunities

• Evolution or Revolution?

Redefining the Way to Pay

Perry Ong, NCG for PSF 2014 2

Chip Based Credit Cards

Debit Cards

Contactless Cards

Chip & Pin Cards

(2017)

Mobile Apps / Wallet

Magnetic Stripe

Charge Cards

(1970s)

Magnetic Stripe Credit

Cards

PaymentCards

Evolution Towards 2020

3 Perry Ong, NCG for PSF 2014

Bulky EDCs

Landline

Wireless / GPRS

eCommerce

WiFi / MPOS

Contactless / NFC / POS

ECR Application

Manual

Imprinters

EDC + Printer

Merchant Acceptance Evolution

Towards 2020

4 Perry Ong, NCG for PSF 2014

Source : Visa 'just wave and go' commercial - via Mumbrella

• Malaysia – the Evolution

• Vision 2020 – the Revolution

• Roles and Opportunities

• Evolution or Revolution?

Redefining the Way to Pay

5 Perry Ong, NCG for PSF 2014

The Revolution Starts … Towards a Cashless Society by 2020

800,000 EFTPOS

1 Billion

Debit Transactions

26 Banks, Issuers and Acquirers

6

Merchants, Retailers, Services, Insurance, Wholesalers, etc

Perry Ong, NCG for PSF 2014

NATIONAL CARDS GROUP

NATIONAL CARDS GROUP

Consumer Awareness Campaigns

Coordinating industry efforts on • 800K EFTPOS and 1 Billion Debit Transactions by 2020 • Chip & Pin deployment (starting July 2015 to December 2016)

• MCCS and MyDebit

7 Perry Ong, NCG for PSF 2014

Chip & Pin Migration requires massive industry coordination

Perry Ong, NCG for PSF 2014 8

NATIONAL CARDS GROUP

Jan 2017

• Online / Offline PIN

• Market switch from PIN bypass to enforced PIN Interoperability

• Retailers for Card acceptance

• Consumers to remember their PIN Communication

• Re-carding of cards timing

• Terminal deployment coordination Deployment

• Abandoned transactions (for non Pin Bypass supported EDC

• Signature transactions (if after PIN enforced date)

• Lost and stolen scenarios

Liability Shift

The Revolution Starts … Towards a Cashless Society by 2020

800,000 EFTPOS

1 Billion

Debit Transactions

26 Banks, Issuers and Acquirers

9

NATIONAL CARDS GROUP

Merchants, Retailers, Services, Insurance, Wholesalers, etc

Perry Ong, NCG for PSF 2014

Malaysia Debit Cards How are we getting there?

0.00

200.00

400.00

600.00

800.00

1000.00

1200.00

0.00

50.00

100.00

150.00

200.00

250.00

300.00

350.00

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Deb

it T

ran

sact

ion

s (m

il)

Deb

it V

olu

me

(RM

) (b

il)

Debit Transactions(mil)

800,000 EFTPOS

45 million Cards

1 Billion Debit

Transactions

Contact-less

Cards & EFTPOS

10 Perry Ong, NCG for PSF 2014

• Malaysia – the Evolution

• Vision 2020 – The Revolution

• Roles and Opportunities

• Evolution or Revolution?

Redefining the Way to Pay

11 Perry Ong, NCG for PSF 2014

Ecosystem – Everyone has a role

• Card Cash

• Card privileges

• Speed in acceptance (contactless)

• Cards

• Cash

• Secure & convenience

• Speed via contactless

• EFTPOS in market

• Value Add

• Remove price barrier

• Contactless

• Issue more Cards

• Promote Card Usage

• Contactless

Issuers Acquirers

Merchants Consumers

12 Perry Ong, NCG for PSF 2014

How do Merchants Gain?

• Increased Sales

• Reduce cash Reduce theft

Reduce Cost

• Increase Average Ticket Size

• Improved Productivity

• Better Customer Service

• Enhance Your Business Image

13 Perry Ong, NCG for PSF 2014

Untapped Opportunities in the Market

Transportation Logistic

Insurance Delivery Services

Micro Merchants Street Vendors

Food & Beverage Fast Food / Cafe

• Increasing Efficiency in payment & collections of your business

• Enabling electronic payment for traditional cash / cheque

collection

• Supporting end to end payment in the vertical business (from

wholesale to retail to consumer)

Source : goSwiff – The Smart Way to Pay 14

Perry Ong, NCG for PSF 2014

• Malaysia – the Evolution

• Vision 2020 – The Revolution

• Roles and Opportunities

• Evolution or Revolution?

Redefining the Way to Pay

15 Perry Ong, NCG for PSF 2014

Redefining the Way to Pay….

2020 Revolution

800K EFTPOS

1 Billion Debit transactions

DEMAND

Real time, faster,

anytime & everywhere

SUPPLY

EFTPOS Online Mobile

16 Perry Ong, NCG for PSF 2014

Perry Ong, NCG for PSF 2014 17 Source : The Future of Money and Mobile Money