Mobile Payment System in Malaysia-Its potentials & consumers' adoption strategies

Mobile payment (M-payment) system is a new and rapidly adopted payment method. With M-payment, a consumer can make payment using his/her mobile phone, instead of cash or check. M-payment system can be used to purchase music, videos, ringtones, books, magazines and etc.

There are four primary models for M-payment:
1.Premium SMS based transactional payments
2.Direct mobile billing
3.Mobile web payments
4.Contactless NFC (Near Field Communications)

Mobile Payment System in Malaysia

Malaysia’s first mobile payment system, TeleMoney was launched in 2002. It was a service using multi-channel access for Internet and wireless transactions and it was free. A customer with a credit card or debit card with a cellular phone could register for the service.

Another M-payment available in Malysia is Mobile Money (MM Wallet) launched by Mobile Money International Sdn Bhd in 2006. It is a system that enables registered users to pay for goods and services at anytime, anywhere using only a mobile phone coupled with a 6-digit security PIN via SMS.

Mobile Money will encourage more consumers to shop online. This will definitely expanding the e-commerce industry in Malaysia. Moreover, it will encourage more merchants to adopt online selling to help them sell more of their products and services.

In this system, a shopper must either have a savings, current or credit card account with participating banks, in order to pay using Mobile Money. The shopper will be billed by the bank accordingly b month’s end, or the amount will be deducted instantly from the account upon successful transaction, depends what the consumers applied.

Potential of Mobile Payment System

M-payment system has high potential to achieve notable success because it offers a very convenient method for consumers. With M-payment, users could send cash to anyone, pay merchants, buy Hotlink reload cards, pay their water bills, by just replying to an authorization PIN to make payment It is new to Malaysian and developing rapidly. The M-payment providers have a large market share to be grabbed on. One of the notable success examples is the G-Cash launched in Philippine. This shows that mobile payment system has high adoptability and acceptability among consumers. Besides, the technology available on mobile phones has rapidly evolved over the past few years. The mobile phone is now becoming an essential life management tools for users. The wide use of mobile phone has made M-payment much easier to be adopted. And, the system is still new in the market, thus it actually has a lower competition as compared to others.

Strategies

To encourage M-payment usage among consumers, providers should educate them about mobile payment, introduce them the variable functions of M-payment and its ease of use. Providers should build confident among consumers by enhancing its system security. Other than that, providers can collaborate with more banks and companies to widen the ability to pay via mobile. This will help to increase customers’ satisfaction and provide convenience to them. Other strategies shall be adopted as well to maintain customers’ loyalty.


Related links:
http://www.zdnetasia.com/news/communications/0,39044192,39001884,00.htm.
http://www.neowave.com.my/mobilemoney_overview.asp
http://www.zdnetasia.com/news/communications/0,39044192,39001884,00.htm