Mobile payment systems in Malaysia: Its potentials and consumers’ adoption strategies.

Mobile payment (M-payments) is new and rapidly-adopting alternative payment method where a consumer can use a mobile phone to pay for wide range of services and digital or hard goods instead of paying with cash, check or credit cards. The goods and the services that can be purchase using this payment method include:

• Music, videos, ring tones, online game subscription or items, wallpapers and other digital goods.
• Transportation fare (bus, subway or train), parking meters and other services
• Books, magazines, tickets and other hard goods

There is definitely a great market opportunity for mobile payment system to implement in Malaysia since almost 88% of the Malaysian population are subscribing to the mobile phone service.

There are few types of mobile transaction can be made:

• Premium SMS transaction
• WAP (mobile web)

Premium SMS transactions are the most common in Malaysia where most of mobile users download their wallpaper, music, ring tones and mobile games by purchasing them through SMS payment. SMS payment requires buyers to send a certain code to certain number to confirm that they want to buy those products.

WAP payment is similar to SMS where buyers are required to select product that they want from the web and a confirmation message will be displayed to them with the details of product before buyer can confirm it.

Maxis and Maybank in Malaysia both provide a simple m-banking service for subscribers (bill payment, balance enquiries, fund transfers), which can also be used to top-up Maxis accounts, download Maxis content and pay for products such as pizzas and movie tickets.

Example of m-payment system that is available in Malaysia is Mobile Money (MM Wallet). Mobile Money is a PIN-based Mobile Payment Solution designed by Mobile Money International Sdn Bhd to address the limitations and bottlenecks created by cash, cheques and credit cards. It allows 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.

A shopper must have a savings, current or credit card account with participating banks in order to pay using Mobile Money. It functions like a Credit Card if a shopper applies for a "Pay by Mobile Phone" credit card account (eg: Hong Leong Mobile Credit Card) and it functions as a Debit Card if it is tied to shopper's savings or current account.

In order to encourage consumers to using this m-payment system, few strategies need to be implementing:

1. Educate consumers about mobile payments, how to use and introduce its functions (e.g. bill payment, mobile purchase)
2. Enhance security and confidence to mobile users
3. Collaborate with more banks and companies to widen the ability to pay via mobile at the same time it helps to increased customer’s satisfaction and confidence