“Overall, we are quite okay because the central bank specifies regulations for digital wallet providers to follow,” CF Fong, who founded his own security services firm, told FMT.
“One of these is to perform security assessments, which is the testing of security.”
BNM’s Guidelines on Electronic Money defines electronic money or e-money as a payment instrument containing monetary value that is paid in advance by the user to the e-money issuer.
According to the regulations, users can pay for the purchase of goods and services to merchants who accept e-money as payment.
“E-money can be issued in different forms, such as card-based (for example, prepaid cards) and network-based which can be accessible via the internet, mobile phones or any other devices,” the regulations state.
According to BNM, the main regulatory objective in overseeing e-money operations is to promote the safety and soundness of e-money schemes and enhance users’ confidence in the usage of e-money.
Although a failure or disruption in e-money schemes is unlikely to cause instability to the financial system, it adds, this may have an adverse impact on the public’s confidence in e-payment instruments.
“Therefore, prudent and safe management of e-money schemes is crucial to ensure wider acceptance and success of electronic payment modes,” it said.
Fong said there were several digital wallet providers in the country, although for him, the security of such payment instruments should not be the main focus.
He said e-wallets were much like physical wallets, just in digital format.
“Most digital wallets rely on the end user, and in this sense it is the mobile device.
“If you lose your wallet, it simply means you lose your money,” he said.
He also noted that digital wallet providers differ in the levels of security imposed, or “how comprehensively they validate their users before they can use the app”.
“For instance, with WeChatPay, you need to be able to log in to WeChat first. That is one example of a security feature that is needed,” he said.
His advice to e-wallet users?
“Pick the one that is more prominent and widely used. Bigger wallet players will have a wider accepting range of merchants.
“Take the Touch ‘n Go e-wallet for example. Many people have the Touch ‘n Go card, but how many merchants out there accept such payment?”