Mobile Payment System in Malaysia: Its Potential & Consumer Adoption Strategies

Mobile Payment System

Vast changing pace of technologies has drastically alter how business operate and how service are being provided. Adoption of technologies has made transaction convenient to consumer. Adapting to the continuous innovation of technologies has create competitive advantages to organization which adopts it.

There is various types of payment system in Malaysia, one of the current and newly introduced system is Mobile Payment system. Mobile Payment are simply defined as payment which is made over mobile devices. Malaysia first introduced mobile payment was in 2001 with the name "TeleMoney", was being managed by System@Work company.

Collaborated with Hong Leong Bank facilitating on settlement of payment and handling payment service in Malaysia. In order to use this service, the only requirement needed was GSM (Global System for Mobile Communication) and an active account with TeleMoney which consist personal identification verification. Any user which has GSM mobile phone and credit card or debit card are eligible to use this form of service.

Besides, System@Work are working with few companies such as Celcom to expand the field of mobile payment which will replace conventional method of settling payment.

In 2009, Maxis has launched NFC (Near Field Communication) in Malaysia, with this new technology enables consumer to make purchases convenient by using mobile phones. FastTap service is newly introduced using NFC embedded into mobile phones for instances Nokia.

Its Potential in Malaysian Market

BNM (Bank Negara Malaysia) foresee the potential of venturing into mobile payment as the new industry, survey shows more than 80% of Malaysian population is subscribed to phone services. Technologies embedded into mobile phones has brought it into the next level apart from the conventional way of only performing voice communications now mobile phones can take picture as well as surfing the Internet. People tend to adopt to this feature easily and it creates an opportunity of business in mobile payment.

On the other hand, another reason of potential is survey conducted by BNM has shown 97% of sample being surveyed has a bank account which bring means to the availability of encouraging bank user to adopt mobile payment as its convenient and less costly to perform.

High percentage of mobile phone subscriber and bank account user provide ideal platform of starting or introducing mobile payment to consumer as their personal payment system.

Consumer Adoption Strategies

Mobile payment has yet to achieve wide acceptance of its service which may due to several factor. BNM stated only 1.8% of the whole Malaysia population of 25 million are currently utilising this service. In order to encourage user to adopt mobile payment there is several ways which may need to prioritize.

The need to collaborate with industry player in area such as common payment messaging format, authentification and securities. Through ensuring having common payment format it enables consumer and merchant to perform transaction easily and less hassle. This involves more cost effective and convenient which draws larger target group to use this service. Consumer will want service and login in which requires less rigidity but at the same time they are ensured their personal information are well protected.

On the contrary, organization must look into the needs of consumer payment preference. Where consumer expectation of service being received plays huge impact on how consumer preceived the system to be efficiency in providing what it has claimed to give or merely an alternative of types of payment.

Therefore its important to educate consumer of mobile payment and features in in it which consumer can fully utilise to the full extend. It involves creating awareness of the existance in market. On the other hand, its also crucial to ensure that consumer felt save when using mobile payment system by increasing their confident level towards performing transaction through mobile phones.

Credit Card Debt: Causes and Prevention

Credit card debt is a burgeoning problem to all. Debt is all around us and getting worse every day. The fact is that through credit card debt is expensive to fund with high interest rate and that there is nearly always some form of credit-usage fee in our account statement. For your information, debt is divided into two groups which are good debt and bad debt. Good debt is such as buying an item like a house or mortgage that will increase in value and followed by bad debt such as 50 “flat screen television you bought on your credit card and are paying the minimum balance on.

The causes of Credit Card Debt
Fact of life
It is that credit card holders do not know how to spend wisely. In other words they would have budget prepared in their life for spending.

“Because they are paying me to do it” policy.
Most of us would put our credit card debt into one debt because the credit card issuer is paying you to do it!! A true fact is that nowadays the credit card company has now become competitive that issuers are fighting among themselves to get sign up to their card.

To Entertain
They are certain people who would use credit card for their entertainment purpose such as clubbing, shopping and holidays. These type of expenses is considered to be unnecessary expenses that should be avoided.

Furthermore, prevention has to be done to avoid credit card debt.
Do not spend more than you actually need.
Money has to spend when necessities only and not for luxurious. Besides that, all the money that you save will get rid of the debt.

Settle down payment in either one of the two ways
a) Take the account with the smallest balance and pay it down first. Try to double the payment due but if that is not possible yet, pay as much extra month that you can afford by achieving the goal of paying the smallest account first, you will become more motivated to continue on your quest.
b) Alternatively, take the account with the largest annual percentage rate and work your plan of attack on this bill first. Again, try to double the payment or at least pay as much extra as you can.

Follow the Plan
Keep following the plan until all credit cards have been paid off. Do not use those accounts again to keep the balances at zero.

Extra Effort
Extra Once your bill is paid off, take that some payment you had been making and apply it towards your next credit card. This extra amount, along with the minimum payment due, will really begin to take a chunk off that balance.

http://www.gobalakrishnan.com/malaysia-credit-card-debt-solution/
http://www.streetdirectory.net.my/travel_guide/149697/credit_cards/6_simple_tips_for_credit_card_debt_help.html
http://www.moneyinstructor.com/art/creditconsolidate.asp

E-Tailing

During those days people tend to shop for goods traditionally from one shop to another. However due to the advancement in technology selling and buying of goods and services can be done over the internet by just a simple click. Those who conduct electronic business online are known as electronic tailers. Electronic markets are the institution that allocates all the resources needed by the demanding parties. Trading over the internet are know to be free trading whereby there is no external planning, selection and decision are made freely, and offers are evaluate based on the individual needs. Furthermore electronic market can be seen as form that connects two substantial infrastructures of our information technology. This mature telemetric form has realized the electronic market whereby they contain supply and demand in the form of virtual information objects which are available equally for seller and buyer all over the world. Furthermore, an electronic market also provides affordable services over the internet. Some of these services include product rating (from magazines test reports or rating agencies), interactive product demonstration (software demonstration program), ordering products from an electronic catalogs and many more.

There are five out of eleven most important electronic market models in retailing. The first model is E-shop. This model mainly focuses on promoting the company goods or services and also the possibly to order and pay, electronically also traditionally. Furthermore there are several benefits provided such as lower prices offered, better information, convenience of selecting, buying and delivering and 24 hours availability. The second model is E-procurement. This model is applied by big company that provide wider choices for supplier that provide better quality of goods, lower cost, and many more. Third is E-auction whereby auction is done on the internet accompanied by multimedia presentation of the goods. Furthermore, it also benefits the supplier and buyers whereby it increases efficiency since no physical movement of goods is needed until the deal is establish. Fourth is E-mall. E-mall is a collection of e-shops with well know brand. Normally it is enriched with guaranteed payment method such as www.emb.ch that gives entry to e-shops. Moreover e-malls reduce complexity and cost to be on the web with sophisticated hosting facilities such as additional traffic generated from other e-malls. The last but not least is third party market place that is suitable for companies that wish to leave the Web marketing. This model works when the third party has something in common and offers at least a user interface to the supplier catalogues such as additional features like branding, payment, logistic and many more.

The internet does not only being used to trade online but also to provide specific services such as the online travel. The online travel provide satisfaction to their customers whereby they can book their ticket online without visiting the travels company and also book hotel rooms in advance. The internet service has made many of the customers to be independent whereby they can take greater control over their traveling plans and also compare prices to evaluate which travels company is offering the best price. For example Air Asia is providing these online services in their specially created website. The internet has left a great impact on the travel industry since the travel industry has to change the way they do business from brick and mortar to online business model. By using the internet the travel industry is providing a new service called the 'dynamic packaging' where consumers put together their own holiday packages by purchasing their flight, hotel, or car rentals separately. In conclusion the internet has change the way business is carried out from traditional to modern way of doing business. However the traditional way is still important as certain consumer prefer face to face meeting before any decision or buying or selling is made.

References:

http://www.electronicmarkets.org/issues/volume-5/volume-5-issue-1/v5n1_schmid0.pdf
http://www.electronicmarkets.org/issues/volume-8/volume-8-issue-2/businessmodels0.pdf
http://www.statcan.gc.ca/pub/63-018-x/2006001/4072207-eng.htm

The application of pre-paid cash card for consumers

A cash card is a pre-paid debit card that enables the holders to make purchases and have them deducted from the card's available balance. (Defination from Creditor Web). While, others defination of pre-paid card is a payment card such as MasterCard, Maestro, Visa Electron and Amex, pre loaded with your own money, which you can then use wherever the payment card is accepted, including in the internet and on board.

Pre-paid cash card has become more and more important nowadays, since it is convenient, easy to get and easy to carry. When you are using the public transportation daily or even you have your own car, in order to pass the thousand and thousand tolls around Kuala Lumpur, pre-paid card such as touch n Go is a smart choice, it save your time to pay the tolls instead of giving money, sometimes you do not have small change, and same as the toll fees collector, it is quite inconvenient, paying fees by money also waste your time as you need to queue, sometimes the long queue will make you crazy, so using touch n Go somehow is a smart choice.

Some example of Pre-paid cash card: Oyster Card in London, England

The picture showed us that, the British use the pre paid cash card to pay the public transportation fees, Oyster cars is similar with touch n Go in our country, is a travelcard that can be used as a tram pass or annual "bus ticket". The main function of pre-paid cash card is using it when you are taking a public transport, there are many countries in the world have this kind of card such as Octopus in Hong Kong, Ezlink card in Singapore to name a few.

Besides that, a pre-paid cash card such as debit card, can be used to buy the goods you want and pay the bill. You can pay insurance, rental fees, electricity bills and water bills and car payment by using the debit card. UTAR and Public Bank also work together, in order to let UTARian can pay their study fees by using the PB Debit card in UTAR campus by charging RM1 service charge. If you pay the study fees by using bank draft, it had a service charge which costs RM5 and RM2.50 service charge by using online paying (go to any PB branch to pay the student fees). So, having a pre-paid cash card is more cost saving and convenient.

Along with these, you can withdraw money anytime as long as there is a ATM Machine, pre-paid cash card provide this kind of application as well. But, it will cost you a higher service charge. Some of the pre-paid cash cards provide you the service by sending and receiving money via bank wire transfer, between two cards. It is very useful and accepted by most of us since it is fast and easy.

In Malaysia, touch n Go can be used to pay the parking fees in some selected place such as 1-Utama shopping complex, Sungei Wang Plaza, Cyberjaya, KLIA, LCCT and so on. It lead Malaysia to a ticketless packing century, and it is an environmental friendly service. Since, it is ticketless, we can save the paper, save the trees and save our earth. Theme park entrance fees can be paid by a pre-paid cash card too such as Bukit Merah Lake Town Resort, it is the one and only theme park in Malaysia which we can pay the entrance fees by using touch n Go.

Touch n Go -The most popular Pre-paid cash card in Malaysia

Some uniqueness of pre-paid cash card in overseas:

Octopus card is a pre-paid cash card that designed for both tranpost and non-transport purposes. You can use the Octopus card in Hong Kong very many usages. It is a multi-usage card which can pay any fees and buy the products, and it can even be the access card to some selected place such as school.

Ezlink card that designed by Singaporean is a useful pre-paid cash card as well. There are numerous reloading points around and a wide range of channels, that you can top up your pre-paid card easily. You can reload the card in every LRT, MRT stations in Singapore, ATM machine too. Ezlink card has provided a auto top up service that card holders need to earn reward from the respective issuing banks for utilising auto top up, so that card holder always has the sufficient money in the card to travel.

Reference:

1.) http://oyster.tfl.gov.uk/

2.)http://www.what-prepaid-card.co.uk

3.)www.touchngo.com.my

4.)www.hong-kong-travel.org/Octopus.asp

5.)www.ezlink.com.sg