Any disruption to this service has immediate and wide-ranging implications for customers, merchants, counterparties, and the broader Malaysian payments ecosystem.
This chapter introduces CBS-2: Payment Processing & Settlement as a critical business service from an operational resilience perspective, recognising its high transaction volumes, real-time customer expectations, and strong interdependencies with national payment infrastructures, clearing houses, and third-party service providers.
The chapter provides a structured breakdown of detailed business processes (Sub-CBS) that collectively support end-to-end payment execution at AmBank, from payment initiation and authorisation through clearing, settlement, reconciliation, and regulatory reporting.
By decomposing the high-level service into distinct, manageable components, the chapter provides a clearer understanding of how operational risks materialise across the payment lifecycle, where vulnerabilities may arise, and how service continuity can be preserved even under severe yet plausible disruption scenarios.
The purpose of this chapter is to establish a clear, process-level understanding of AmBank’s Payment Processing & Settlement service to support effective operational resilience planning.
Readers are expected to learn how a critical business service can be systematically decomposed into sub-processes that are meaningful for impact tolerance setting, dependency mapping, scenario testing, and business continuity planning.
This chapter also serves as a foundational reference for subsequent resilience assessments, ensuring that risk, technology, and operations stakeholders share a common and consistent view of what constitutes the end-to-end payment service.
Table P1: Detailed Processes for CBS-2
|
Sub-CBS Code |
Name of Sub-CBS |
Description of Sub-CBS |
|
2.1 |
Payment Initiation & Capture |
Capture of payment instructions from customers (e.g., POS, online banking, API, DuitNow, FPX) and validate input data before onward processing. Includes merchant/payment gateway forwarding and initial risk checks. |
|
2.2 |
Authorization & Verification |
Communicate with issuing banks, card schemes, or clearing houses to verify funds availability, identity authentication, and fraud/risk screening. Determines whether payment may proceed to settlement. |
|
2.3 |
Clearing & Message Exchange |
Exchange transaction details between acquiring bank (AmBank), networks, and counterparties (card associations, interbank networks). Matches and reconciles payment instructions, prepares for settlement. Clearing may involve batch handling for systems such as ACH/net settlement. |
|
2.4 |
Settlement Execution |
Transfer of funds across accounts and banking systems. For retail fast payments (e.g., DuitNow), settlement is in real time or near real time; for batch settlement (e.g., card/debit), scheduled net settlement occurs, crediting merchant and debiting payer accounts. AmBank also functions as a settlement bank for fintech partners on national platforms. |
|
2.5 |
Reconciliation & Exception Handling |
Reconcile settled transactions against internal records, discrepancies flagged for investigation. Includes balancing books, mismatch resolution, and exception escalations for failed/returned payments. |
|
2.6 |
Fees, Charges & Accounting Posting |
Calculate applicable fees (interchange, merchant service charges), posting charges to appropriate ledgers, and preparing general ledger entries for settlement batches. Ensures accurate financial reporting. |
|
2.7 |
Reporting & Regulatory Compliance |
Generate reports for internal management (volumes, settlement status) and external regulators (Bank Negara Malaysia, PayNet reporting obligations). Ensures compliance with statutory standards. |
|
2.8 |
Customer Notification & Statement Updating |
Notify customers/merchants of payment status (confirmation, failure, settlement completion) and update customer account statements or online banking records accordingly. |
In conclusion, this chapter frames Payment Processing & Settlement not merely as a technical or transactional function, but as a mission-critical service whose resilience underpins customer confidence and financial stability.
By clearly defining and documenting its Sub-CBS components, AmBank is better positioned to identify critical dependencies, assess the impact of disruptions, and implement proportionate resilience measures.
This structured approach supports regulatory expectations for operational resilience and strengthens AmBank’s ability to continue delivering essential payment services during periods of stress or disruption.
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Operational Resilience Framework: A Case Study of AmBank Malaysia |
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| eBook 3: Starting Your OR Implementation |
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| CBS-2 Payment Processing & Settlement | |||||
| CBS-2 DP | CBS-2 MD | CBS-2 MPR | CBS-2 ITo | CBS-2 SuPS | CBS-2 ST |
To learn more about the course and schedule, click the buttons below for the OR-300 Operational Resilience Implementer course and the OR-5000 Operational Resilience Expert Implementer course.
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