Effects of Anti-money Laundering and Anti-terrorism Financing Law on Innovation of Mobile Payment Systems in Malaysia

• Pages: 117-128
• Date: 26 August 2019
• Published date: 26 August 2019
• DOI: https://doi.org/10.1108/978-1-78973-545-120191013
• Author: Suhaimi Mhd Sarif,Ainul Jaria Maidin,Jamaludin Ibrahim,Abdul Rahman Ahmad Dahlan

Chapter 7

Effects of Anti-money Laundering and

Anti-terrorism Financing Law on Innovation

of Mobile Payment Systems in Malaysia

Suhaimi Mhd Sarif, Ainul Jaria Maidin, Jamaludin Ibrahim and

Abdul Rahman Ahmad Dahlan

Abstract

Dynamism of digital economy requires innovation in the mobile payment

system to provide for the free ow of information to facilitate electronic

transactions. However, regulations and standards were introduced at the

global and country levels to impose limitations on mobile payment system

to protect consumers’ interests. The Malaysian government introduced the

Anti-money Laundering, Anti-terrorism Financing and Proceeds of Un-

lawful Activities Act 2001 (Act 613) (AMLA) to protect the people from

being involved in offences both locally and internationally and an unlawful

activity carried out physically or by using virtual mechanisms. It is argued

in this study that AMLA has hindered the innovation of the digital eco-

nomic system that is promoted by the government in line with global devel-

opments. The research method adopted is personal interview with selected

respondents to gather their views on the challenges posed by the restric-

tions imposed by AMLA that has had the impact of limiting innovations

in the mobile payment system sector.

Keywords: Money laundering; terrorism nancing; mobile payment system;

legal measures; Malaysia; innovation nance

Introduction

The digital economy enhances commercial transactions in terms of speed, vol-

ume, security and data management with efcient record keeping. New wealth

Emerging Issues in Islamic Finance Law and Practice in Malaysia, 117–128

Copyright © 2019 by Emerald Publishing Limited

All rights of reproduction in any form reserved

doi:10.1108/978-1-78973-545-120191013