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Payment Systems

Financial Services Act 2013 and Islamic Financial Services Act 2013

The Financial Services Act (FSA) and the Islamic Financial Services Act (IFSA) came into force on 30 June 2013, replacing the repealed Payment System Act 2003 (PSA). The FSA/IFSA incorporates strengthened provisions to regulate payment system operators and payment instrument issuers in order to promote safe, efficient and reliable payment systems and instruments. Operators of systems that enable the transfer of funds from one banking account to another or provide payment instrument network operation will require approval from the Bank to operate such systems. As for those wishing to offer merchant acquiring services, such person is required to be registered with the Bank. These new requirements will replace the existing notification regime under the PSA. For issuers of designated payment instruments, the regulatory approach remains largely unchanged under the FSA/IFSA. The issuers of designated payment instruments are required to obtain approval from the Bank.
 
The FSA and IFSA contain provisions that enable BNM to effectively perform its oversight role. In general, this includes empowering the Bank to specify standards, as well as, to issue directions, for the purpose of ensuring the safety, integrity, efficiency and reliability of the payment systems and payment instruments

Click to view the Financial Services Act 2013 and Islamic Financial Services Act 2013