International Money Transfer Policy: Malaysia
Mar 08 2021According to research by Statista, transaction value in the online remittances segment amounts to 492m USD in 2020 in Malaysia. Transaction value is expected to show an annual growth rate (CAGR 2020-2023) of 19.6% resulting in the total amount of 841m USD by 2023 in Malaysia. Here is the position of Malaysia in the remittance share in Gross Domestic Product among other Southeast Asia countries:
Online remittance regulations
In the Malaysian financial system, Bank Negara Malaysia (BNM) is the country’s regulator and central bank. The regulatory body issued policies on when and what type of CDD (Customer Due Diligence: identification documents) banking and non-bank institutions must conduct when customers request a wire transfer or e-money transactions.
Standard CDD (national id, residential address, employment status, the purpose of the transaction, etc.) must be conducted when customer bank wire involves an amount equivalent to 3,000 RM (690 USD) and above.
For e-money transactions by both bank and non-bank issuers of e-money standard CDD measures must be conducted when any of the following conditions are met:
(a) the account limit is equivalent to 5,000RM (1100 USD) and above;
(b) the monthly transaction is equivalent to 5,000RM (1100 USD) and above;
(c) the annual transaction is equivalent to 60,000RM (14 000USD) and above;
(d) the account is for payments of goods and/or services outside Malaysia;
(e) the account is for cross-border wire transfers; or
(f) the account is used for cash withdrawal.
If any financial institution represents non-face-to-face business relationship using e-KYC, they shall also comply with the following requirements:
(a) for remittance transactions performed by an individual (including an expatriate), a total transaction limit not exceeding an aggregate amount of 30,000RM (7000 USD) per day shall be observed, unless otherwise approved by Bank Negara Malaysia; and
(b) for remittance transactions performed by an individual who is a foreign worker: (i) a total transaction limit not exceeding an aggregate amount of 5,000RM (1100 USD) per month shall be observed, unless otherwise approved by Bank Negara Malaysia; and (ii) funds can only be remitted to the individual’s home country, and, beneficiaries must be pre-registered by the individual with the reporting institution when the business relationship is established.
Bank wire fees
Malaysian banks can charge up to 6% of the transaction amount in addition to a flat fee. Flat fees could be found on the website of Bank Negara Malaysia. The objective of the initiative is to promote transparency: Information on E-payment Services and Fees
Cash Limit Transaction
Malaysia has a practice of cash transaction limit policy, which is not unique on the global market and implemented by such countries as the UK, France, Italy and others. CTL is a limit on the amount that can be paid by physical cash per transaction. Any cash transaction above this limit will have to be paid electronically. From January 2020, BNM lowered the daily cash threshold report (CTR) from 50,000RM (12 000 USD) to 25,000RM (6 000 USD).
Credit and debit cards
Bank Negara Malaysia has the list of approved issuers of cards on market for transparency on the website: Credit Card Issuers
Credit cards policy says that the cardholder can only hold credit cards from a maximum of two issuers and the maximum credit limit extended to the cardholder shall be two times his monthly income per issuer.
Usage of Malaysia issued cards overseas are regulated by each card issuer individually and charges are usually 1%-3% per transaction.
ATMs
Malaysian ATMs have both per transaction and daily withdrawal limits. These vary from bank to bank but are usually in the region of 1500 RM (344 USD) per transaction and 3000 RM (690 USD)-5000 (1150 USD) RM per day.
One of the leading banks in Malaysia Maybank increased the maximum daily ATM withdrawal limit from 5,000RM to 10,000RM (2 300 USD).
Most ATMs in Malaysia charge a withdrawal fee of between 8 and 24RM (1.8 USD - 5 USD).
Cryptocurrency policy
The Bank reiterates that digital currencies are not recognised as legal tender in Malaysia. Dealings in digital currencies are not covered by prudential and market conduct requirements applicable to licensed and authorised activities, or by established avenues for redress in the event of complaints or losses and damages incurred by parties dealing in digital currencies.
Summary
Sending money to and from Malaysia you need to remember:
- Bank Negara Malaysia requests a report and strict identification process when bank wire involves an amount equivalent to 3,000 RM (690 USD) and above.
- Bank Negara Malaysia requests a report and strict identification process when e-money monthly transactions are equivalent to 5,000RM (1100 USD) and above and the annual transaction is equivalent to 60,000RM (14 000USD) and above.
- For remittance online transactions performed by an individual, a total transaction limit not exceeding an aggregate amount of 30,000RM (7000 USD) per day shall be observed unless otherwise approved by Bank Negara Malaysia.
- For remittance transactions performed by an individual who is a foreign worker: (i) a total transaction limit not exceeding an aggregate amount of 5,000RM (1100 USD) per month shall be observed, unless otherwise approved by Bank Negara Malaysia.
- The Cash Limit Transaction is 25,000RM (6 000 USD).
- The limits in ATMs are 1500 RM (344 USD) per transaction and 3000 RM (690 USD)-5000 (1150 USD) RM per day.
- The Bank reiterates that digital currencies are not recognised as legal tender in Malaysia.
STICPAY for Malaysia
STICPAY offers to open a local currency account in RM, local bank wire withdrawal payment method in Malaysia within 1–2 days, and our very own prepaid STIC card available in more than 177 countries.
Sources:
Bank Negara Malaysia - Cash Transaction Limit Information Pack
Bank Negara Malaysia - Cash Transaction Limit (CTL) : What You Need to Know
Cointelegraph - Malaysia to Impose Cash Transaction Limit of $6K in 2020: Report
Comply Advantage - Anti-Money Laundering Compliance in Malaysia
Fintech News - What is The Role of Fintech in Asia's Growing Remittance Market?
Transferwise - ATMs in Malaysia
Debit Card | Making purchases or withdrawing cash at ATM - HSBC MY
The Star - Malaysia to impose cash transaction limit of RM25,000 next year
ATM Travel Guide - ATMs In Malaysia - Fees, Withdrawal Limits & More...
Bank Negara Malaysia - Credit Card
Finder - Using a credit card in Malaysia: Guide to potential costs
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