Digital Banks, e-Wallets and DuitNow: Malaysia's Open Finance Explained

Malaysia now has five fully licensed digital banks, more than 50 active e-wallets, and a single real-time payment rail called DuitNow that links nearly every financial institution in the country. If you have wondered how these pieces connect, who regulates them, and whether your money is actually safe inside an app, this guide answers all of that.

For a full map of this topic, see this topic. For guidance on putting your savings to work once your accounts are set up, read our guide on where to start investing in Malaysia.

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The big picture: Malaysia’s digital finance stack

Think of Malaysia’s cashless ecosystem in three layers.

1. The payment rail (DuitNow, operated by PayNet) moves money instantly between any bank, e-wallet or financial app.
2. The access layer (e-wallets, debit cards, banking apps) sits on top of that rail and is what you actually tap or scan.
3. The account layer (digital banks, conventional banks) holds your deposits, earns interest, and is where PIDM protection applies.

Understanding which layer you are using tells you what protection you have and what you should expect from a product.

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Malaysia’s five licensed digital banks

Bank Negara Malaysia (BNM) awarded five digital banking licences under the Digital Banks framework. By end-2025, all five were operational and had collectively attracted 2.4 million customers and RM4.2 billion in deposits, with roughly 65 per cent of those customers coming from previously unserved or underserved groups such as gig workers, low-income households and youth (BNM, 2025).

Bank	Backer	Licence type	Key differentiator
GXBank	Grab Holdings	Conventional (FSA 2013)	First to launch; integrates with Grab app
Boost Bank	Boost Holdings + RHB Bank	Conventional (FSA 2013)	Targets MSMEs and gig economy
AEON Bank	AEON Financial + MoneyLion	Islamic (IFSA 2013)	Up to 20 savings pots; AEON loyalty perks
Ryt Bank	YTL Digital Capital	Conventional (FSA 2013)	Positions itself as AI-native
KAF Digital Bank	KAF Investment Bank	Islamic (IFSA 2013)	Second Islamic digital bank; launched Aug 2025

All five are PIDM member institutions, which means deposits are automatically insured up to RM250,000 per depositor per bank, the same protection you have at Maybank or CIMB. This protection is free and requires no sign-up (PIDM).

What interest rates look like

Digital banks generally offer higher savings rates than conventional banks in order to attract customers.

Bank	Indicative savings rate (mid-2026)
GXBank Bonus Pocket	Up to 3.55% p.a. (6-month tenure)
Boost Bank Special Jars	Up to 3.80% p.a. (with eligible spending)
AEON Bank savings pots	Up to 3.50% p.a. (promotional, check current terms)

Note: digital bank promotional rates change frequently. Always check the bank’s app for the current figure before making a decision.

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E-wallets: convenient but different from bank accounts

Malaysia has more than 50 licensed e-money issuers, regulated by BNM under the Financial Services Act 2013. The most widely used include Touch ‘n Go eWallet, GrabPay, Boost (the wallet, separate from Boost Bank), ShopeePay and BigPay.

The critical distinction you need to know: e-wallet balances are not bank deposits. They are classified as e-money, and are therefore not covered by PIDM. If the e-money issuer fails, your balance is not insured in the same way a savings account would be.

This does not mean e-wallets are unsafe for their intended purpose, which is everyday spending and payments. The BNM licensing process requires e-money operators to safeguard customer funds in a ring-fenced account at a licensed bank. However, you should not park large amounts of money in an e-wallet the way you would in a savings account.

Practical rules for e-wallets

• Keep only what you plan to spend in the near term in your e-wallet.
• Use your e-wallet’s auto top-up feature to avoid locking up cash unnecessarily.
• Check that your e-wallet operator holds a valid BNM e-money licence (the list is on the BNM website).

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DuitNow: the backbone of cashless Malaysia

DuitNow is Malaysia’s national real-time payment system, operated by PayNet (a joint venture owned by BNM and the banking industry). It has two main components.

DuitNow Transfer lets you send money instantly to a bank account, e-wallet or phone number 24 hours a day, seven days a week, with no cut-off time and typically no fee for standard transfers.

DuitNow QR is the standardised QR code that all merchants, banks and e-wallets must accept. You scan the same QR code whether you are paying from Maybank, CIMB, TNG eWallet or GXBank.

The numbers behind the rail

PayNet processed 8.44 billion digital transactions in 2025, maintaining 99.995 per cent system availability and handling an average of 260 transactions per second (PayNet, 2025). Separately, BNM reported that total e-payment transactions reached 18.4 billion in 2025, a 25 per cent increase over 2024, and that the average Malaysian made 538 e-payment transactions during the year (BNM Annual Report, 2025).

DuitNow QR volume specifically doubled to 3 billion transactions in 2025 (from 1.5 billion in 2024), with nearly 3 million registered merchant touchpoints nationwide. Cross-border QR payments grew 2.5 times to 29.7 million transactions, with linkages operational to Singapore, Thailand, Indonesia and China, and India expected to join in 2026 (BNM, 2025).

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Open Finance: what is coming next

The most significant structural change on the horizon is BNM’s Open Finance framework. BNM published an Exposure Draft in November 2025 defining Open Finance as permissioned, secure sharing of customer financial data between institutions and licensed third parties.

In plain terms: with your explicit consent, a personal finance app could read your salary deposits, outstanding loan balance, EPF balance and investment portfolio in one dashboard, without you manually entering any data. You can revoke consent at any time, and the data consumer must immediately delete your information on revocation.

How the rollout is phased

BNM is proposing a staged mandatory rollout:

Date	Covered institutions
1 January 2027	Banks with more than 1 million customers
1 January 2028	Banks with more than 100,000 customers
1 January 2029	Development financial institutions and e-money issuers with more than 5 million active users

Technical infrastructure is being built by PayNet with seven banks and the Employees Provident Fund (EPF), with a pilot targeted for mid-2026. BNM is also exploring linking Open Finance consent management to MyDigital ID, so you would use a single national digital identity to manage which apps can see which parts of your financial life.

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Is your money safe? A quick decision guide

Situation	Protection	Action
Savings in a BNM-licensed digital bank	PIDM: up to RM250,000	Check the PIDM register at pidm.gov.my
Balance in a BNM-licensed e-wallet	No PIDM; funds ring-fenced at a licensed bank	Keep only spending money here
Investment in a unit trust or robo-advisor	Regulated by Securities Commission	Covered by investor protection rules, not PIDM
Sending via DuitNow Transfer	Regulated PayNet rail	Funds settlement is near-instant

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Key takeaways

• Malaysia has five BNM-licensed digital banks, all operational as of end-2025, with 2.4 million customers and RM4.2 billion in deposits collectively.
• Digital bank deposits carry PIDM insurance up to RM250,000 per depositor per institution, identical to conventional banks.
• E-wallets are not bank accounts and are not covered by PIDM. Use them for spending, not storing.
• DuitNow QR volume doubled to 3 billion transactions in 2025, and the same QR code works across all banks and e-wallets.
• BNM’s Open Finance framework, with a mandatory rollout starting January 2027 for large banks, will let you share your financial data with authorised apps using your consent, with the right to revoke any time.
• The digital bank licence criteria specifically target the underserved: about 65 per cent of current digital bank customers were previously unbanked or underbanked.

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Frequently asked questions

Are digital banks in Malaysia real banks? Yes. All five digital banks, namely GXBank, Boost Bank, AEON Bank, Ryt Bank and KAF Digital Bank, hold licences from BNM under the same laws that govern conventional banks. They are subject to capital requirements, cybersecurity standards and consumer protection rules. Your deposits are insured by PIDM up to RM250,000.

What is the difference between a digital bank and an e-wallet? A digital bank holds a banking licence and takes deposits, which are PIDM-insured. An e-wallet is a licensed e-money instrument for payments; balances are not bank deposits and not covered by PIDM. Some companies, like Boost, operate both: Boost (e-wallet) and Boost Bank (digital bank) are separate products with different protections.

Can I use DuitNow to transfer money to any bank in Malaysia? Yes. DuitNow Transfer works across all participating banks and major e-wallets in Malaysia. You can send using the recipient’s phone number, MyKad number, or bank account number. Transfers are instant, and most banks do not charge for standard DuitNow transfers.

What does Open Finance mean for my privacy? Under BNM’s proposed Open Finance framework, no third party can access your financial data without your explicit consent. You can revoke consent at any time, and the data consumer must delete your data immediately on revocation. PayNet, which is building the infrastructure, will not be able to read or store your data. The framework is not yet mandatory; the first phase targets large banks from January 2027.

Is my e-wallet balance protected if the company goes bankrupt? BNM requires e-money operators to hold customer funds in a ring-fenced account at a licensed bank, which provides some structural protection. However, this is not the same as PIDM deposit insurance. In a failure scenario, recovery would depend on the ring-fencing arrangement rather than an automatic insurance payout. Keep only everyday spending balances in e-wallets.