Latest news with #MoneyServicesBusinessAct2011
The Star
07-08-2025
- Business
- The Star
Money services businesses must rethink models amid digitalisation
PETALING JAYA: With digitalisation on the rise, traditional players in the money services business (MSB) must rethink their models given the low margins and high-volume demands of the trade, stakeholders say. Suria Muhabat Sdn Bhd chief executive officer Manimakudam Karuppiah said despite traditional currency exchange holding about 80% market share, many operators were struggling due to high operating cost, slim margins and competition in the MSB sector. 'Post-Covid-19, digital and app-based platforms now hold 20% of the market, driven by younger, tech-savvy users. Over-the-counter services such as ours remain relevant, especially for older customers or those who prefer instant cash, transparency and personal interaction,' he said. 'Many of us in the MSB industry are small-scale or family-run businesses with limited funds. 'Venturing into digitalisation requires a lot of financial resources – which most players don't have.' He said MSB businesses were regulated by Bank Negara Malaysia under laws requiring high compliance costs like the Money Services Business Act 2011 and Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (Act 613). He added that the industry was frequently classified as high-risk by banks, with little access to capital for digitalisation efforts. Manimakudam said even licensing was limited to a maximum renewal period of three years, making it difficult for traditional players to commit to long-term digital investments due to the uncertainty. He recognised that digitalisation was the future, adding that his company had implemented it in remittance operations, at a high cost. KL Remit Exchange director Mohamed Faizal Mohamed Arif said his business had been impacted by the introduction of the multi-currency digital card. He said it was difficult to compete with a global service with a head start and strong social media presence. 'This is a family business, and since Covid-19, the multi-currency card and digital payment methods have affected us because there are fewer tourists visiting our counters,' he said. 'We have four branches – three in Kuala Lumpur and one in Shah Alam – which have been unprofitable, and we have been covering expenses from our own pockets. 'The model is volume-driven, just like traditional money exchange. Even if their USD rate is slightly lower, like 4.24 compared to our 4.25, they still profit due to the high number of transactions.' Despite concerns, Malaysian Association of Money Services Business president Datuk Seri Jajakhan Kader Gani said the industry remained resilient, with strong revenue reported based on recent statistics. While diversified players in the MSB sector make up around 10%, cash transactions continued to dominate, he said. 'Based on our assessment, we anticipate strong growth in the digital segment and gradual decline in traditional practices. 'If you have resources and deep pockets, invest in digitalisation.' Jajakhan said many MSB businesses were unable to adopt digitalisation due to insufficient financial support, grants and skills development programmes. When asked if affected MSB businesses were shutting down, he said there were 250 members and only a small number had closed shop or surrendered licences due to operational reasons. He said some traditional businesses like banks were downsizing because digitalisation had reduced the need for many physical branches.
New Straits Times
01-05-2025
- Business
- New Straits Times
BNM imposes penalties totalling RM35,000 on Merchantrade, JAGS Money
KUALA LUMPUR: Bank Negara Malaysia (BNM) imposed a total of RM35,000 in administrative monetary penalties (AMP) on Merchantrade Asia Sdn Bhd and JAGS Money Sdn Bhd. In a statement today, the central bank said that an AMP of RM29,000 was imposed on Merchantrade Asia and RM6,000 on JAGS Money due to non-compliance with the Money Services Business Act 2011. "The non-compliances are due to Merchantrade Asia's oversight of sanctions screening procedures, and gaps in updating their sanctions database upon the publication of the Domestic List," BNM said. Merchantrade Asia, as a reporting institution, is required to conduct sanctions screening on existing, potential or new customers against the Domestic List and United Nations Security Council Resolutions (UNSCR) List as part of the customer due diligence and ongoing due diligence processes. It also has to ascertain that potential matches with the UNSCR List or Domestic List are true matches to avoid false positives. "In response, Merchantrade has since strengthened its processes by subscribing to a commercial database service to ensure it receives updates on the sanctions list in a timely manner, and that staff and agents are provided with regular on-the-job training to improve compliance," BNM said. Meanwhile, JAGS Money's non-compliances resulted from failure to promptly update the sanctions database upon the publication of the Domestic List and failure to conduct sanctions screening on new customers against the Domestic List. "JAGS paid a total of RM6,000 for the AMP imposed by BNM on March 17, 2025," the central bank said.
Free Malaysia Today
30-04-2025
- Business
- Free Malaysia Today
BNM slaps Merchantrade Asia with RM29,000 penalty
Bank Negara Malaysia said Merchantrade has since strengthened its processes by subscribing to a commercial database service. (Facebook pic) KUALA LUMPUR : Bank Negara Malaysia has imposed RM29,000 in administrative monetary penalties on Merchantrade Asia Sdn Bhd and RM6,000 on JAGS Money Sdn Bhd for breaching the Money Services Business Act 2011. 'The non-compliances are due to Merchantrade Asia's oversight of sanctions screening procedures, and gaps in updating its sanctions database upon the publication of the Domestic List,' BNM said in a statement. Merchantrade Asia, as a reporting institution, is required to conduct sanctions screening on existing, potential or new customers against the Domestic List and United Nations Security Council Resolutions (UNSCR) List as part of due diligence processes. It also has to ascertain that potential matches with the UNSCR List or Domestic List are true matches to avoid false positives. 'In response, Merchantrade has since strengthened its processes by subscribing to a commercial database service to ensure it receives updates on the sanctions list in a timely manner, and that staff and agents are provided with regular on-the-job training to improve compliance,' the central bank said. On the other hand, JAGS Money's non-compliance resulted from failure to promptly update the sanctions database upon the publication of the Domestic List and failure to conduct sanctions screening on new customers against the list.
The Star
30-04-2025
- Business
- The Star
Bank Negara imposes penalties totalling RM35,000 on Merchantrade Asia, JAGS Money
KUALA LUMPUR: Bank Negara Malaysia (BNM) imposed a total of RM35,000 in administrative monetary penalties (AMP) on Merchantrade Asia Sdn Bhd and JAGS Money Sdn Bhd. In a statement today, the central bank said that an AMP of RM29,000 was imposed on Merchantrade Asia and RM6,000 on JAGS Money due to non-compliance with the Money Services Business Act 2011. "The non-compliances are due to Merchantrade Asia's oversight of sanctions screening procedures, and gaps in updating their sanctions database upon the publication of the Domestic List,' BNM said. Merchantrade Asia, as a reporting institution, is required to conduct sanctions screening on existing, potential or new customers against the Domestic List and United Nations Security Council Resolutions (UNSCR) List as part of the customer due diligence and ongoing due diligence processes. It also has to ascertain that potential matches with the UNSCR List or Domestic List are true matches to avoid false positives. "In response, Merchantrade has since strengthened its processes by subscribing to a commercial database service to ensure it receives updates on the sanctions list in a timely manner, and that staff and agents are provided with regular on-the-job training to improve compliance,' BNM said. Meanwhile, JAGS Money's non-compliances resulted from failure to promptly update the sanctions database upon the publication of the Domestic List and failure to conduct sanctions screening on new customers against the Domestic List. "JAGS paid a total of RM6,000 for the AMP imposed by BNM on March 17, 2025,' the central bank said. - Bernama
