BANDAR SERI BEGAWAN — Online interbank transfers have grown 116 percent since April 1, when banks waived transfer charges to help businesses during COVID-19, said the deputy chair of Autoriti Monetari Brunei Darussalam (AMBD).

YB Pehin Orang Kaya Seri Kerna Dato Seri Setia (Dr) Hj Awg Abu Bakar Hj Apong said the central bank has seen a “phenomenal increase” in payments through the real-time gross settlement (RTGS) system from March to October 2020 compared to the same period last year.

“Even though it is driven primarily by the pandemic, we foresee this trend to shift local consumers’ behaviour and preferences, which may outlast the pandemic,” said YB Pehin Dato Hj Awg Abu Bakar, who is also the home affairs minister.

The minister was speaking during the World FinTech Festival 2020 on Wednesday,  jointly organised by Monetary Authority of Singapore and SingEx, with Brunei as a partner city via AMBD.

The waiving of bank fees was part of the government’s $450 million economic stimulus package for businesses, private sector employees and self-employed individuals affected by the COVID-19 pandemic.

COVID-19 accelerates move to digital payments

Local banks such as BIBD also reported a rapid growth in digital adoption driven by COVID-19.

BIBD acting head of retail banking Irwan Lamit said the bank’s e-wallet solution, QuickPay, has seen a 200 percent increase in digital transactions.

Its NEXTGEN mobile app is now at an 80 percent adoption rate while there was a 23 percent rise in new registrations.

“In terms of the transactions conducted on our mobile app, we’re looking at $1.5 billion for a population of over 400,000 this year.

“We also see our ATM cash withdrawal dropping by seven percent. There is a significant shift from a cash economy to a digital-based economy. Our customers are more ready to accept digital payment systems,” Irwan added.

He further said overseas card transactions declined over 90 percent, but have been offset by increased domestic spending.

BIBD’s Acting Head of Retail Banking Irwan Lamit (R) during the World FinTech Festival 2020 at The Empire Brunei. Photo: Rasidah Hj Abu Bakar/The Scoop

AMBD develops digital payment hub

AMBD is currently working with the fintech industry to develop a shared ‘Digital Payment Hub’ that will centralise digital transactions and facilitate instant payments.

The streamlined payment hub enables real-time payments among consumers and between consumers and merchants, said YB Pehin Dato Hj Awg Abu Bakar.

Bank payment processors and fintech companies can also connect to the hub to enable payments between their channels or apps.

Digital payment hub is one of three flagship projects under the Digital Economy Masterplan 2025, which was launched in June this year. The other flagship projects are Digital ID and People Hub.

Baiduri Bank’s head of Group Information and Technology Simon Hansman said once Brunei has a basic digital payment hub in place, e-wallets from banks or fintech companies will be able to connect to the hub, allowing for easy payments.

Cross-border payments can also be developed with other countries, he added.

Baiduri Banks Head of Group Information and Technology Simon Hansman (R) during the World Fintech Festival 2020 at The Empire Brunei. Photo: Rasidah Hj Abu Bakar/The Scoop

Hansman said Brunei has already established payment channels such as RTGS, automated clearing house, point-of-sale network and payment gateway solutions.

He added that RTGS is restricted to banks only and is costly even though it is now free at the moment due to the COVID-19 pandemic.

For the point-of-sale network, participants must be holders of a card brand and the funds will only be settled the next day. Payment gateway solutions involve online payments to merchants only and are usually card-based.

“What is missing is low cost… transactions should be very cheap, open with real-time payment infrastructure covering all the major payment types.

“While banks need to be key players, it needs to be open to fintech and other payment providers to connect, leverage and develop. Payments should also be real-time and settled within seconds,” he continued.

Brunei to establish fintech association

YB Pehin Hj Abu Bakar said the ‘White Paper on The State of FinTech in Brunei Darussalam’ recommended the establishment of Brunei Darussalam FinTech Association.

“The association can act as a networking platform to centralise all fintech related activities within the country and to forge Memorandums of Understanding (MOUs) with other fintech hubs,” he added.

The white paper was published this year and outlined various recommendations in pursuing the development of the fintech ecosystem in the country.