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

Mobile payment system has been widely introduced in developing country years ago. However, it has only been popular recently in Malaysia. The lack of advertisements and less involvement by required authorities are the critical reasons for the late introduction of mobile payment system in Malaysia.

Mobile payment system is a system that involves collection of money from a consumer through a mobile device such as his/her mobile phone, Smart Phone, PDA, or other similar devices. Mobile money plays an important role in mobile payment system.

Mobile money is an innovative mobile payment system that gives you the convenience of cash-free and card-free shopping as well as making remote payments. In this case, mobile device acts like a wallet. However, it does not hold your cash. It holds the value that you have in your registered savings, current or credit card account with participating banks.

Mobile Money International Sdn Bhd is one of the biggest mobile payment service providers in Malaysia. Mr. Lee Eng Sia sees the opportunity and potential of mobile money and thus initiated the idea of mobile payment system introduced in Malaysia. The company objective is to provide Merchants and consumers with a convenient and secure Mobile Payment and Mobile Commerce platform.

In accordance with the system designed by Mobile Money, a registered consumer is required to send a SMS which indicates his/her registered 6-digit security pin to merchant’s mobile phone numbers or bank accounts to make payments for goods and services purchased anytime, anywhere. In the same time, it allows user to receive money from anyone, from anywhere, at anytime. It also provides a list of miss call numbers for you to check your account, to get SMS instructions to purchase products and to top up your Money Mobile wallet, or to check your balances and last transactions. Illustration below shows how the mobile transaction works.

Although mobile payment system is not a fresh term anymore, however it still has huge potentials in Malaysia. The introduction of mobile money has benefited both participating merchants and consumers. Mobile money enables involved merchants to take online order without the requirement for online shoppers to disclose their credit card information. In the same time, it gives online merchants another option in the selection of payment gateway to be implemented. Furthermore, the cost-effectiveness of mobile money has make mobile money becomes favorable to merchants. In the same time, the beneficial functions provided by mobile money such as reliability and convenience will soon impose a significant growth in e-commerce industry in Malaysia. Thus, it will attract more merchants to adopt online selling as an extra sales channel, enhancing the use of mobile money.

On the other hand, consumers who use mobile money service are able to enjoy the convenience to pay anyone, including to any bank accounts from anywhere, at anytime. You can pay various bills and your loan repayments at home. The convenience, enhanced security and guaranteed safety promised add in more value into mobile payment system. With mobile money, consumer can start to buy and save from participating mobile commerce platform. In this case, cost saving and convenience have been important elements in attracting consumers to involve in mobile payment system. In addition, the functions provided by mobile money are additional add-in value in attracting consumer in using mobile money. It can function like a credit card if a consumer applies for a “Pay by Mobile Phone” credit card account. Therefore, the consumer will be billed by the bank by month’s end. Alternatively, it can function as a Debit Card if the consumer applies for savings or current account. The amounted consumed will be deducted directly from the account upon successful transaction.

In conclusion, mobile payment system may seem to be attractive and beneficial based on above discussion. However, mobile payment system in Malaysia is not well established. Consequently, merchants’ involvements, as well as consumers’ supports are greatly appreciated and required to popularize mobile payment system.