Mobile Payment Systems in Malaysia: Its Potentials and Consumers’ Adoption Strategies

Mobile payment is a type of payment that enables consumers to use their mobile phones to pay for the services and digital or hard goods that are consumed by them. It means using a mobile device to conduct a payment transaction in which money or funds are transferred from a payer to a receiver via an intermediary, or directly without an intermediary. There are four primary models for the mobile payments that are available in the market. There are Premium SMS based transactional payments, Direct Mobile Billing, Mobile web payments (WAP) and Contactless NFC (Near Field Communication). Furthermore, this system is widely used in Europe and Asia countries.

Steps in Mobile Payment Systems:

1) Consumers who choose to pay their bills via Mobile Money for the goods and services rendered from participating merchants.

2)Consumer gives his/her mobile number via phone, fax and email to the merchant.

3) Merchant can bill the consumer via IVR, Mobile Money website or SMS.

4) Consumer authorizes the payment by replying the SMS with the Bill Reference Number and customer's 6-digit Security Pins to the merchants.

5) After mobile money received the bank's confirmation, then they will send a payment notification to the merchant as well as the customer.

Mobile payment systems has a significant potential in Malaysia. This is due to the expectation of such system to reach more than $600 billion globally by 2013 from the combined market for all types of mobile payments. Moreover, the mobile payment market for goods and services is expected to exceed $300 billion globally by 2013 which has not included the contactless NFC transactions and money transfers. So, there will be a potential to generate huge profits to the local firms if the system is widely applied in Malaysia.

Besides that, the mobile payment system is not commonly used in Malaysia. So, the market for such system is still at the developing stage and the competition is weak at this point of time. The increasing numbers of mobile phone users is another potential for the mobile payment systems to be widely use in Malaysia.

The first consumers’ adoption strategy that the company carries out to encourage the use of mobile payment systems is to provide incentives for the consumers such as fulfill their needs, make the system to be convenient and easy to use, keep the system in low costs and ensure the system with perceived security. Second, the company co-operates with their competitors in the market. The cooperation can operate within industry (telco-telco) or cross industry (telco-bank). Third, the technology required for mobile payment systems is basically available. In such markets, the existing technology is good enough for the system and the company should improve upcoming technologies for its reliability, speed, costs and security. Next, the companies must ensure that they are complying with (regional) legislation even though there is not yet of any regulation or legal certainty for governing this field.

The use of mobile payment systems in the world is keep increasing in these few years due to the increasing number of mobile phone users. This system is more convenient and easier to use compared with the traditional payment methods. Compared to the advancements in other countries, Malaysia is still in its starting point. We believe that in future, this mobile payment strategy will become more popular as we have mobile phones that enable us to connect to the internet anytime we want. So, this system has a bright future in Malaysia.

Links:

http://www.neowave.com.my/mobilemoney_howitworks.asp