Key Facts for Malaysia
- Primary real-time rails: DuitNow, FPX.
- Typical settlement times: Payments are completed in a matter of seconds.
- Common limits: Consumer accounts have a daily limit of RM 50,000, and business accounts have a per-transaction limit of RM 10,000,000.
What “real-time payments” means in Malaysia
In Malaysia, real-time payments are instant, 24/7 fund transfers processed through the Real-time Retail Payments Platform (RPP). This system, known to consumers as DuitNow, facilitates secure, data-rich payments for individuals, businesses, and government agencies. The scope is broad, covering everything from peer-to-peer transfers and e-commerce to bill payments and government disbursements. While no single statute provides a verbatim definition, the legal framework is established by the Financial Services Act 2013 and the Central Bank of Malaysia Act 2009, which mandate the promotion of safe and efficient payment systems.
The system is regulated by Bank Negara Malaysia (BNM), the country's central bank, which is also the largest shareholder in the platform's operator, Payments Network Malaysia (PayNet). PayNet manages the core infrastructure, including subsidiary systems like the Financial Process Exchange (FPX) and Interbank GIRO. All transactions are settled through RENTAS, Malaysia’s real-time gross settlement system. To support rich data and interoperability, the RPP was built from the outset using the ISO 20022 messaging standard, aligning it with modern global payment infrastructures.
Malaysia’s harmonized, inclusive, and modern infrastructure positions it as a regional leader and a key participant in developing global cross-border payment networks.
Payment Rail Overview
DuitNow
Introduced in December 2018, DuitNow is Malaysia's national instant transfer service operating on the Real-time Retail Payments Platform (RPP). It allows individuals and businesses to send and receive money instantly using simple identifiers like a mobile number or National Registration Identity Card (NRIC) number, bypassing the need for bank account details. The system also incorporates DuitNow QR, a unified national QR code standard for interoperable payments at merchants from various bank and e-wallet apps.
- Proxy Addressing: A user can link their bank account to an easy-to-remember alias, such as a mobile number or business registration number, to receive funds without sharing account details.
- ISO 20022 Standard: The system is built on a modern messaging standard that supports rich data, allowing for detailed remittance information to be sent with payments.
- 24/7 Availability: The network operates around the clock, including on weekends and public holidays, for continuous payment processing.
- Interoperable QR Codes: DuitNow QR provides a single, unified QR code that merchants can display to accept payments from customers of any participating bank or e-wallet.
Pros
Instant transfers are available 24/7.
Payments are simplified through the use of aliases instead of account numbers.
Transactions are low-cost or free for individuals and small businesses.
Cons
Daily transaction limits apply to retail accounts.
Some advanced features like request-to-pay are still being rolled out across the network.
FPX (Financial Process Exchange)
FPX is an online payment gateway operated by PayNet that facilitates real-time payments for e-commerce and bill payments directly from a customer's bank account. When making a payment, the user is redirected to their bank's secure online portal to authorize the transaction, which then debits their account instantly. While broadly trusted for online transactions, payment confirmation is asynchronous, meaning merchants often rely on webhooks to get the final status of a payment.
- Direct Bank Debit: Customers can pay for online purchases using funds directly from their savings or current accounts.
- Secure Redirection: The payment process moves the user to their own bank's trusted login page to authorize the transaction, adding a layer of security.
- Broad Acceptance: It is a popular and trusted payment method for e-commerce, bill payments, and donations across Malaysia.
- Low Transaction Cost: It offers a cost-effective payment solution for merchants compared to other online payment methods.
Pros
It is a highly trusted and familiar payment method for online purchases in Malaysia.
The process is secure, using the customer's own bank authentication.
Transaction costs are low for businesses.
Cons
The user experience involves being redirected away from the merchant's site.
Payment confirmation for merchants is not instantaneous.
IBFT (Interbank Funds Transfer)
Launched in 2006, IBFT is one of Malaysia's original real-time payment rails, providing instant fund transfers between different banks. It functions as a direct bank-to-bank transfer system, requiring the recipient's full bank account number to initiate a payment. While still functional, many of its capabilities have been superseded by the more modern and feature-rich DuitNow system.
- Real-Time Transfers: Funds are credited to a recipient's account at another bank almost instantly.
- Direct Bank Integration: The service operates directly through the online banking portals and ATMs of participating financial institutions.
- Wide Availability: It is supported by most major banks in Malaysia as a standard transfer option.
Pros
It is an established and reliable method for direct bank-to-bank transfers.
The service is widely available through most banks.
Cons
It requires the recipient's full bank account number, making it less convenient.
The system lacks modern features like aliases and rich data support found in DuitNow.
Limits, Fees, and SLAs
Consumer accounts are capped at RM 50,000 daily, while corporate accounts can transact up to RM 10 million per payment.
The network functions around the clock, 365 days a year, offering continuous payment processing without any service interruptions or cut-off times.
Compliance and Risk
KYC/KYB & AML
Malaysia mandates strict adherence to the Anti-Money Laundering Act 2001. Bank Negara Malaysia (BNM) requires all payment system participants to implement robust Know Your Customer (KYC) procedures, which includes thorough identity verification and continuous monitoring to combat financial crime.
Data Residency & Privacy
While specific data residency mandates aren't detailed, all financial operators must adhere to national privacy standards. The handling of personal information, including data for proxy addressing, is governed by Bank Negara Malaysia's oversight, affirming the protection of consumer data.
Fraud Controls
The Financial Services Act 2013 requires payment operators to guarantee system integrity. PayNet’s risk management framework, combined with BNM’s active fraud alerts and technology risk mandates, creates a multi-layered defense system focused on transactional security and consumer protection.
Recordkeeping & Audits
Regulatory oversight from Bank Negara Malaysia imposes prudential standards on all payment operators. This includes implicit obligations for maintaining detailed transaction records and undergoing regular audits to demonstrate financial stability and operational compliance with the governing frameworks.
Lightning Network Integration as a Solution
The Lightning Network is a second-layer protocol on Bitcoin that processes transactions through off-chain payment channels. This structure permits faster and cheaper payments than the main blockchain. It complements domestic real-time payment systems by offering a global, interoperable network for instant settlements. While local rails are confined by national borders, the Lightning Network uses Bitcoin as a universal settlement asset, extending the principles of real-time payments to a worldwide scale.
While both systems offer a near-instant payment experience for users, the Lightning Network operates with significantly lower fees, often fractions of a cent, making micropayments viable. Its primary advantage is its borderless nature. Unlike national systems with near-total domestic reach, the Lightning Network provides global accessibility for instant payments, connecting users worldwide without needing traditional financial intermediaries.
- Cross-Border Complexity: It bypasses the intermediaries and currency conversion delays inherent in international payments, offering a single network for global transactions.
- Micropayment Viability: Extremely low transaction fees make it economical to process high volumes of small payments, a use case that is often cost-prohibitive on other networks.
- Financial Inclusion: It provides access to digital payments for individuals in regions with limited banking infrastructure, requiring only an internet connection and a compatible wallet.
For businesses operating in a global marketplace, integrating this technology presents a clear path toward more efficient and inclusive financial operations.
B2B Enterprise Use Cases
- Supplier Payments – A company pays international suppliers directly through payment channels, settling invoices in seconds across borders. “Business value:” Instant B2B payments reduce working capital cycles and strengthen supplier relationships.
- Merchant Settlement – A payment service provider aggregates funds from global customers and settles them instantly to a merchant’s treasury account. “Business value:” Immediate access to sales revenue with zero chargeback risk from irreversible payments.
- Treasury Optimization – A multinational corporation moves funds between its international subsidiaries 24/7, using Bitcoin as a bridge asset. “Business value:” Real-time global liquidity management without waiting for traditional banking hours or settlement periods.
- Global Payroll – A business pays its international remote workforce and freelancers instantly, bypassing correspondent banking systems. “Business value:” Simplifies cross-border payroll and gives workers immediate access to their wages.
- Content Micropayments – A digital media company collects small, per-unit payments from a global audience for articles, music, or videos. “Business value:” Creates new revenue models by making high-volume, low-value transactions economically feasible.
Cross-Border Transactions and Remittances to Malaysia
Cross-border real-time payments face significant friction. Connecting separate national payment systems requires complex rail bridging, and navigating varied foreign exchange paths introduces delays and costs. In Malaysia, stringent regulations add another layer of complexity, with all crypto moving in or out of the country requiring processing through a locally licensed exchange. This creates operational hurdles and settlement delays, challenging the very idea of "real-time" international transactions and driving the need for a more universal payment infrastructure.
- Singapore: Malaysia is working with Singapore to connect their domestic instant payment systems through initiatives like Project Nexus. This aims to make transfers between the two countries as fast as domestic payments, targeting completion within 60 seconds.
- Indonesia: As a key partner in regional payment integration, Indonesia is part of efforts to establish interoperable QR code payments with Malaysia. This corridor is also a major channel for remittances from Indonesian workers in Malaysia.
- India: This corridor is a major destination for remittances from Malaysia, supporting students and families. Services like GOremit and mobile-based platforms cater to this flow, which includes a large volume from foreign workers.
The Lightning Network addresses these issues by using Bitcoin as a universal settlement asset. This approach bypasses traditional banking intermediaries and complex currency conversions, offering a single global network for instant, low-cost settlements and dramatically reducing both transaction time and fees.
How Lightspark Makes Integration Easy
Lightspark helps fintechs, digital banks, wallets, and exchanges integrate with the Lightning Network by abstracting away its operational complexities. We provide a complete platform that handles the difficult parts of the process, including automated liquidity management, dynamic routing optimization, and built-in compliance screening. Our robust developer tooling and APIs are designed for rapid implementation, allowing you to offer your customers sub-second settlement globally. By managing the underlying infrastructure, we help you focus on building new products and expanding your reach. To see how you can connect to a universal payment network, Talk to our team.
Sources and Further Reading
- https://www.aciworldwide.com/real-time/malaysia – ACI's role in Malaysian payments.
- https://www.bis.org/about/bisih/topics/fmis/nexus.htm – BIS Project Nexus for cross-border payments.
- https://fastpayments.worldbank.org/sites/default/files/2021-09/World_Bank_FPS_Malaysia_RPP_Case_Study.pdf – World Bank's case study on Malaysia's RPP.
- https://www.lightspark.com/contact – Contact information for the Lightspark team.
- https://www.lightspark.com/knowledge/how-the-lightning-network-is-transforming-bitcoin – How Lightning changes Bitcoin transactions.
- https://www.lightspark.com/knowledge/is-crypto-legal-in-malaysia – The legal status of crypto.
- https://www.lightspark.com/knowledge/what-does-the-lightning-network-do – Explains the Lightning Network's purpose.
- https://www.lightspark.com/news/insights/what-are-lightning-payments – An introduction to Lightning payments.
- https://paynet.my/fi-rpp.html – PayNet's overview of the RPP.
- https://www.touchngo.com.my/news/touch-n-go-ewallet-facilitates-hassle-free-cross-border-remittances-to-50-countries-beyond-malaysia – Touch 'n Go's remittance services.
- https://www.transfi.com/blog/malaysias-payment-rails-how-they-work---duitnow-fpx-qr-codes-the-move-toward-instant-payments – A guide to Malaysian payment rails.
- https://www.worldbank.org/en/topic/payments-and-market-infrastructures – World Bank on payment systems.
