Introduction
On 30 June 2026, Bank Negara Malaysia (“BNM“) published the latest Interoperable Fund Transfer Framework (“IFTF“), which supersedes the Interoperable Credit Transfer Framework (“ICTF“) issued on 23 December 2019.
What is the IFTF?
The IFTF sets out the requirements governing interoperable fund transfer services provided through Malaysia’s shared payment infrastructure, which currently comprises the Real-time Retail Payments Platform operated by Payments Network Malaysia Sdn. Bhd. (PayNet). The shared payment infrastructure connects bank accounts and non-bank electronic money accounts for:
- account-to-account (“A2A“) fund transfers; and
- payments to merchants, including through interoperable quick response (“QR“) codes.
The framework applies principally to licensed banks, licensed Islamic banks, prescribed development financial institutions (“FIs“), approved issuers of designated payment instruments, registered merchant acquirers and approved operators of payment systems.
The IFTF aims to further expand network reach and avoid market fragmentation, ensure fair and open access to the shared payment infrastructure, promote a level playing field, and strengthen financial consumer protection and fair market competition. It also introduces requirements intended to maintain the safety and reliability of fund transfer services and preserve the integrity and resilience of the financial system.
Key Updates
- Expansion to Cross-border Services
The previous ICTF principally addressed credit transfers in Malaysia. The IFTF now expands to cover cross-border A2A fund transfers and cross-border purchase transactions through the interoperable QR code scheme.
The commencement of the relevant requirements will be aligned with the live operationalisation of cross-border transactions under the Nexus scheme, which is to be announced by BNM. In its Feedback Statement, BNM explained that it intends to maintain the expectation that participants enable both domestic and cross-border services to ensure a seamless user experience and promote wider network effects.
- Phasing Out of Proprietary QR Code Networks
Under the IFTF, participating banking institutions and eligible electronic money issuers (“EMIs“) and acquirers must not operate or offer proprietary QR code scheme networks. Existing proprietary networks must be fully phased out by 30 June 2028 and no new merchants may be onboarded onto those networks during the two-year transition period.
BNM considers this necessary to prevent market fragmentation and improve user experience by moving towards an environment in which all QR payments in Malaysia are interoperable. In practical terms, customers of a participating bank or eligible e-wallet provider should be able to pay merchants served by any participating acquirer through the interoperable QR code scheme.
The IFTF separately provides that an acquirer that has a contractual arrangement with an EMI which does not participate in the shared payment infrastructure (noting that only standard and limited-purpose EMIs are not required to participate) may operate a proprietary QR code scheme solely to facilitate payments made by customers of that same EMI.
- Wider and More Structured Access to Shared Payment Infrastructure
Access to the shared payment infrastructure is extended to FIs and other regulated entities in Malaysia, subject to objective, non-discriminatory and risk-based access requirements.
Other regulated entities must demonstrate compliance with relevant BNM standards, including financial strength, information technology (IT) and cyber-risk management, liquidity and settlement-risk management, customer and merchant onboarding, customer and merchant protection measures, and anti-money laundering/countering the financing of terrorism (AML/CFT) risk management. This must be verified through an independent assessment conducted by an external party.
- Stronger Governance, Competition and Oversight Requirements
The IFTF introduces more detailed requirements on shared payment infrastructure operators. This includes participant admission and appeals, risk management, transparent, objective and non-discriminatory fee structures, withdrawal or suspension of access, sponsorship arrangements and ongoing monitoring of participants.
The IFTF also prohibits operators of the shared payment infrastructure and other approved operators of payment systems from imposing exclusive routing rules or restricting the equal display of network branding where the interoperable QR is presented. In its Feedback Statement, BNM further clarified that both “on-us” transactions within the same participant and “off-us” transactions between different participants under the QR code scheme should be routed through the shared payment infrastructure to support system-wide monitoring and timely and coordinated fraud detection and response measures.
Key Takeaways
Banking institutions, eligible e-money issuers and acquirers should review their existing QR payment arrangements, identify any proprietary QR code scheme networks and determine the operational, system and contractual changes required to comply with the IFTF.
During the transition period, it should be emphasised that no new merchants may be onboarded onto an existing proprietary network and such networks must be fully phased out by 30 June 2028.
Institutions participating in cross-border services should also assess their readiness to implement the relevant A2A and QR purchase services in accordance with the timelines to be announced by BNM.
How We Can Help
Christopher & Lee Ong is closely monitoring the implementation of the IFTF and related regulatory developments. We can assist affected institutions in assessing the application of the new requirements to their existing payment arrangements, identifying necessary operational and contractual changes and preparing for the applicable transition timelines.
If you have any queries on the above, please reach out to our team set out on this page.
For regional Financial Services Regulatory matters, please see Rajah & Tann Asia’s Financial Services Regulatory Practice for more information.
Contribution Note
This Legal Update is contributed by the listed Contact Partners, with the assistance of Paralegal Aleena Ismail.
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