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

Pages117-128
Publication Date26 Aug 2019
DOIhttps://doi.org/10.1108/978-1-78973-545-120191013
AuthorSuhaimi 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

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