When the Digital Payment Hub is officially launched, will people in Brunei be able to receive money via Paypal? The short answer to the question is no. The longer, and perhaps more hopeful response is, ‘it’s complicated’.
The Digital Payment Hub, developed by the National Digital Payments Network (nDPX), will eventually streamline one of the barriers for the payment giant, and other similar services, to integrate payment systems in the country, according to nDPX Project Manager Rahim Harun.
“If Paypal were to enter Brunei in the current landscape, they would have to establish siloed connectivities with each of the different bank. This means one connection with BIBD, one with Baiduri bank, one with Standard Chartered and so on,” he said at the Digital Economy Forum 2024, during an interview with the Bulletin
“It’s not very cost-effective,” he added.
According to Rahim, what nDPX is doing is laying the foundations for a system that global payment services can connect to.
When the digital payment hub comes online, Paypal, and other similar global players in the digital payment industry, only has to establish a connection with nDPX and get a licence from the Brunei Darussalam Central Bank, “and they are good to go”, he said.
However, even with that particular process streamlined, the project manager said it would still be up to the industry to make the business decision on whether or not Brunei is worth making that connection with.
Still something to look forward to
Regardless of whether or not Paypal, or other service providers, choose to connect to nDPX and allow locals to receive payments, the platform still have other functions that would help grow the use of digital payments in the country.
One of its features is to break the ‘silos’ of digital payment apps of banks and e-wallets that currently make up the e-commerce landscape in the Sultanate.
“If you have a BIBD app, for example, you cannot use it to scan the QR code from Pocket,” said Rahim. The platform will standardise the process by introducing a ‘common’ QR code from which all participating bank apps and e-wallets can scan and pay, he said.
The other function is the facilitation of near-instant cash transfers from one account to another, as well as to send payments to other users using the recipient’s phone number.
“The payment hub is a good start for Brunei to catch up with other economies internationally and regionally,” he said. “This platform will open up opportunities for businesses in the country to innovate.”
The Digital Payment Hub had recently conducted its pilot programme with real money, which the project manager said went very well. At the moment, their goal is to launch phase one of the system in the fourth quarter of this year.
Bank representatives are also keen on the launch of the Digital Payment Hub.
During a panel session at the Digital Economy Forum, Baiduri Bank Deputy CEO Manuel Bulens during the conference said that the bank was very excited. “There is always a bit of apprehension when it comes to new technology,” he said, “But we believe that the positives outweigh the negatives. In other markets, banks have survived, even thrived with national payment systems, so that is not a big concern.”
He believed nDPX and its digital payment hub will open the doors to ‘a lot more competition’ in the space of digital payments, and will allow for more innovation to drive costs down. “Hopefully, the end users will benefit,” he said. “We are excited to see what future nDPX will bring.”
Meanwhile, Head of Consumer Private Business Banking at Standard Chartered Bank Brenda Low said they are also very supportive and looking forward to be part of the journey.
“With this in place, businesses will be able to manage their cash flows better instead of having to manually reconcile payments (from multiple bank accounts),” she said, referring to the eventual introduction of a common QR code for digital payments in the country.
And having easier access to this data, it can help businesses be more transparent and get better credit facilities from financial institutions, she said during the panel.
Security Concerns
Phase one includes the near-instant cash transfer from one account to the other, along with the function to send payments via phone numbers, said Rahim, the project manager. In 2025, nDPX hopes to enable users to request payments from other users, which is part of phase two.
During the Digital Economy Forum, some members of the public raised questions on potential security risks involved, including scammers sending payment requests to vulnerable members of society, such as the elderly.
At the panel session, CEO of nDPX Hafiz Haslen said it was an important element that the company is keeping in mind. “As it was rightfully pointed out, with an instant payment system, things move faster. In places where these systems are in place, authorised push payment (APP) fraud is on the rise and these systems are facilitators for those,” he said.
The CEO said that they will have checks and balances in place, such as going with a purely opt-in approach as well as using a whitelist so only certain accounts can request payments. He also stressed the need to raise awareness on the issue, as these scams are ‘not technologically driven’ but often socially engineered.
Hafiz highlighted that this was a shared responsibility in the industry, including financial institutions. “This is an existing problem within the ecosystem,” he said, adding that he hoped that over time they will be able to teach the public to be less susceptible to those scams.
