MALAYSIA is continuing to chart good economic growth which will be reflected in the third-quarter gross domestic product (GDP) figures, said Bank Negara governor Tan Sri Dr Zeti Akhtar Aziz.

“The numbers are still good. We will make an announcement on the GDP after Hari Raya,” she told reporters after officiating at a function in Kuala Lumpur yesterday.

Zeti had said recently early indications were that the numbers were still good despite rising oil prices and the slowing down of manufacturing sales in July and August.

Malaysia recorded GDP growth of 7.6% in the first quarter and 8% in the second.

The governor yesterday launched the Financial Process Exchange (FPX), a multi-bank Internet payment platform managed by Malaysian Electronic Payment System Sdn Bhd (MEPS).

In her speech, Zeti said economic expansion hinged on the effective intermediation function of the financial system and the efficiency of funds flow was integral to the overall functioning of the system.

“The strengthening of commercial facilities, including e-commerce, was pivotal to the process of gaining significance as a trading nation, she said.

“While the reality of the Internet boom in the 1990s brought many e-commerce proponents to revalidate their expectations, the Internet provides us with an outreach, other than wireless technology, that surpasses any other known medium. As a result, e-commerce through the Internet has been gaining significance and its potential should not be discounted,” she added.

The FPX is a payment system which leverages on banking institutions' Internet banking services to provide on-line assurance of payments, enables payment references to accompany payments to facilitate reconciliation of transactions, and provides an efficient and cost-effective settlement mechanism.

The system is intended to support the various initiatives of the private sector and the Government in e-commerce, through the use of an industry-wide payment platform that will have a more comprehensive outreach to users, compared with the existing bank-centric models.

“It is our hope that the FPX would facilitate e-commerce transactions and encourage businesses to undertake process re-engineering to reach out to wider markets, facilitate end-to-end e-commerce transaction flows and reduce operating costs through the use of modern day technology,” Zeti said.

She said the banking institutions should do more to encourage consumers and businesses to use the electronic payment systems.

“It is noted that while a vast array of electronic payment systems and instruments has been introduced against a background of more flexible regulatory policies and advancements in technology, the use of cheques remains pervasive in Malaysia,” she said.

More than 90% of non-cash retail payments in Malaysia are made by way of issuing cheques, albeit at a slower average annual growth rate of 2% in the recent two years, compared with the use of the inter-bank Giro which has increased at the rate of 197% during the same period.

MEPS chairman Datuk Amirsham A. Aziz said FPX's pilot programme was initiated last month with six banks – Bumiputra-Commerce Bank, Bank Islam, Public Bank, Deutsche Bank, Hong Leong Bank and Maybank.

“We expect all the remaining financial institutions to be on board by the middle of next year,” he said.

There are about 20 merchants linked to the FPX, including early adopters such as MASKargo, Universiti Putra Malaysia, Jaring, Financial Link and Syarikat Takaful Malaysia.

Amirsham said efforts were being taken to reach across the country's borders to position FPX for local and cross-border payments with other payment hubs.

“Future development would include an electronic letter of credit (LC) to supplement the current paper-based LC, as well as the provision of mobile and kiosks as transaction channels to supplement the current Internet banking,” he said.