Bank Negara Malaysia (BNM) today announced a new pricing strategy for payment services to address the current price distortion between electronic payments and paper-based payment instruments.

Its Governor, Tan Sri Dr Zeti Akhtar Aziz, said under the new pricing reform, the fee for electronic payment methods would be reduced to incentivise businesses and for consumers to adopt the more cost effective electronic payment methods while charges would be levied on cheques to reflect its higher cost.

Effective May 2, 2013, the fee for Interbank Giro (IBG) transactions that is performed online, via Internet banking and mobile banking, will be at 10 sen.

"Currently the fee is RM2. The low online IBG fee is aimed at providing the incentive for users to switch from other more costly payment methods to lower cost alternatives," Zeti told a press conference in conjunction with the release of the central bank's 2012 Annual Report.

Zeti said online payments, via Internet banking and mobile banking, brought about significant benefits to both individuals and businesses.

In addition, individuals enjoy the convenience of transacting anytime anywhere, avoiding the queues at bank counters while businesses can lower the cost of doing business through the reduction or redeployment of resources used for handling cash and cheques.

"With more payments done electronically, there will also be cost savings from manual processes including postage," she said.

Meanwhile, to reduce the cost and inefficiencies associated with the use of cheques, the charge for cheques, which is currently at RM3.00, would be increased progressively to reflect its production cost.

The general public and businesses would be given one year to familiarise with the new pricing strategy, adjust and migrate to using IBG for their payment transactions.

During the one-year period, BNM would work closely with the financial industry to further improve the payment infrastructure to ensure payment services are easily accessible, secure and convenient.

"Effective April 1, 2014, banks will charge a cheque processing fee of 50 sen on the issuer of the cheque. This fee is in addition to the existing stamp duty of 15 sen per cheque leaf," Zeti said.

In addition to cheques and IBG, adjustments in pricing for the other payment channels and methods, including automatic teller machines would be phased in progressively to steer consumers to adopt the more cost effective electronic payment methods.

The Governor said by 2020, the pricing of all payment services would be based on the cost of providing the service.

Today, 1.6 billion financial transactions are carried out using electronic means, double the amount in 2006.

While the progress is positive, the target is to increase the number of electronic payments per capita from 56 in 2012 to 200 by 2020 and to reduce the number of cheques cleared in the country by half from 204 million to 100 million during the same period, she added.

Achievement of these targets will bring Malaysia closer to reaping annual savings up to 1.0 per cent of Gross Domestic Product which studies have shown an economy would achieve by shifting from paper-based to a more electronic-based payment systems.

Zeti said the need to accelerate the migration was even more important now as Malaysia undergoes a transition towards a high-value added, high-income economy.