Mobile Payment Systems In Malaysia:Its Potential and Consumers' Adoption Strategies

Nowadays, there is is a marvelous potential for mobile telecommunication networks because it become a significant electronic payment way in Malaysia. This is because, 88% of Malaysian are subscribing to mobile phone services.

Mobile payment system is a system that collects money from consumer through his or her mobile phone, smart phone, personal digital assistance (PDA), wireless tablets and any other devices that can connect to mobile telecommunication network. It make it possible for payment to be made.

E-purse application includes credit cards, ATM cards and debit cards which is embedded in My Kad. However, it is one of the card payments possibilities in Malaysia. Therefore, mobile money plays a significant role in mobile payment system because it helps users to reduce the bottlenecks that created by cash, check and credit cards. It also provides users a convenience function which is cash-free and card-free shopping as well as make it an out-of-the-way payment.

There are 2 ways of mobile payment.

1. Premium SMS
2. Mobile Web Payments (WAP)

Premium SMS is a based transactional payment which required registered customers send his or her payment through a SMS text message that indicates his or her registered 6 digits security code to merchant's mobile phone number. Or, they can use their bank accounts to make their payments as they purchase goods and services at anytime. If consumers made payment via SMS, a premium charge will apply to their phone bill. Consumers will get SMS instructuons to purchase products, can check balances and last transactions. By using premium SMS, they even can top up consumers' Money Mobile Wallet. Contrary to mobile web payments which only allow consumers to make their payment by using mobile phone connect to web pages.

Potential of Mobile Payment:

Cost
Mobile payment method would not less cost than existing payment merchanism. However, the only way to solve the mobile payment is to compete with other modes of payment in term of cash and convenience.

Speed
Mobile payment must be performed to acceptable speeds.

Cross border payments
The mobile payment should be accepted globally and world wide.

Security, privacy and trust
There must be a trust between consumers and the mobile payment application. They should assure the consumers that their information will not be misused or disclosed.

Interoperability
The evolution should be based on standards and open technologies. It must be confirm that it permits for an implemented system to interact with other systems.

Simplicity and usability
User friendly is the key point for the mobile payment application to deal with the consumers. However, consumers must be able to personalize the application that suit the convenience and request.

Universality
The transactions provided by mobile payment service is from one consumer to other consumer, from business to consumers or from business to business. Therefore, it must be universality for each users. Thus, the coverage is including domestic, regional and global environments. Hence, they payment must make either in the low value micro-payment or high value macro-payment.

Consumers' adoption strategies:

Credit card based mobile payment
According to the credit card based mobile payment model, the customers' mobile phone number is linked by the credit card number because when customers make a mobile payment transaction with a merchanct, then the credit card will be charged and the amount will be automatically credited in the merchanct account.

Bank account based mobile payment
There is a win-win solution for the banks and telecommunication if they both co-operate to provide a mobile payment solution. The reason is that customer's mobile phone number is linked by the bank account. So, when they make the transaction through a merchant, it will be automatically debited the customer's bank account and the amount of payment will be credited to the merchant account.

Complexity
A low adoption of variety of payment systems includes smart cards and mobile banking will lead to complixity and usability problem.

Compatibility
The stability between an innovation and the values, experience, and needs of potential adopters will be captured by the compatibility.




Sources from:

• http://www.ftc.gov/bcp/workshops/techade/pdfs/presentations/linlor.pdf
• http://www.venturewoods.org/wp-content/uploads/2008/06/mobile-payment-systems-and-services.pdf
• http://en.wikipedia.org/wiki/Mobile_Payment_Services_Association
• http://www.mindcommerce.com/Publications/Mobile_Commerce_OnTheGo.php
• http://lifeofecom.blogspot.com/2009/02/mobile-payment-systems-in-malaysia-its_15.html