EXCLUSIVE: BNM, banks make RM170 mil from ATM charges

By Ranjit Singh

PAYMENT Network Malaysia Sdn Bhd or Paynet, which is jointly owned by Bank Negara Malaysia (BNM) and a consortium of local banks, is making supernormal profits from charges for automated teller machine (ATM) services.

According to filings with the Companies Commission of Malaysia (CCM), Paynet, formerly known as Malaysian Electronic Clearing Corporation Sdn Bhd, recorded a profit after tax (PAT) of RM170.1 mil for the year ended Dec 31, 2018 compared to RM62.6 mil the previous year. 

It recorded a  revenue of RM348.8 mil for the year ended Dec 31, 2018, giving it a hefty profit margin of nearly 50%. For 2017, the company registered a revenue of RM196 mil, giving a profit margin of over 30%.

In the two-year period to end-2018, the company chalked up a stellar revenue growth of 77.5%. It has been consistently enjoying margins in excess of 30% since 2014 (when data was first available in CCM). It has a paid-up capital of RM851 mil and total shareholders’ funds of RM1.27 bil as of end-2018.

Paynet is 37% owned by BNM while the 11 local banks making up the consortium hold a 5.73% stake each in the company or a combined total of 63.03%. The 11 banks are Hong Leong Bank Bhd, Bank Muamalat Malaysia Bhd, CIMB Bhd, AmBank Bhd, Affin Bank Bhd, RHB Bhd, Bank Islam Malaysia Bhd, Public Bank Bhd, Alliance Bank Malaysia Bhd, Maybank Bhd and Bank Rakyat.

Paynet owns 100% of the MEPS network under which banking transactions can be made via ATMs of all banks in the network. For this, RM1 is charged per transaction for domestic banks and RM4 per transaction for foreign banks.  

Industry observers and consumers question the need for the network to charge for such services when interbank online transactions are free. However, cash withdrawals can be made only at banks or ATMs.

The question is whether customers are being charged too much for making transactions via ATMs, when most transactions are free online for bank customers and whether charges can be lowered for cash withdrawals given revenue margins of almost 50%. 

The Federation of Malaysian Consumers’ Association (Fomca) has called for a review on the RM1 charge for inter-bank ATM withdrawals.

Its president Datuk Paul Selvaraj tells FocusM the review was timely in view of the spiralling cost of living.

“We opine that with the technological advances currently, the RM1 charge for inter-bank withdrawals should be reviewed. The review is also necessary due to the high cost of living,” he said.

The issue of whether the central bank should be involved in a commercial endeavour remains to be addressed. BNM as a supervisory and regulatory body should not have a business undertaking as it runs counter to the rationale for its primary role. 

Currently, online domestic transfers are not levied any fees but the charge of RM1 for inter-bank ATM withdrawals remains. – Jan 29, 2020

 

 

 

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