Payment Systems: Malaysia's RHB ties up with PayPal
Malaysian bank RHB has announced a tie up with US based money remittance business PayPal in a move that gives the US company access to a market where its dealings were in a grey area.
Money transfer in Malaysia is tightly regulated despite some recent relaxations. But with those relaxations has come much stricter enforcement and dozens - maybe hundreds - of informal money transmitters have been closed down.
PayPal has operated a policy of rejecting business from Malaysia, even going so far as to freeze the accounts of non-Malaysians who access their accounts from Malaysia. But even so, some Malaysians have been able to access its services.
What PayPal needed was either some form of authorisation or to follow the route adopted by e.g. Western Union and tie up with a local bank.
Wisely, they have chosen the latter course.
For customers of RHB, the move will prove instantly profitable - Western Union fees are high, RHB will charge about USD0.50 to access its USD PayPal service.Domestic remittances (in MYR) will cost only half that much.
But the charge is promotional: as from 1 August, it will increase fourfold. Even so, that is much cheaper than using Western Union though local banks.
It is also simpler: recently a remittance to a Western Union office in Kuala Lumpur was returned because the recipient's middle name was represented by an initial rather then her full name as per her passport. All other details, including the passport number were correct, the customer says.
As PayPal operates by way of an e-mail address, and credit to a PayPal account that has been confirmed as belonging to the recipient, such difficulties will be avoided.
However, the system is available only to those with a bank account and / or a credit card, neither of which are required for cash remittances.
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