Mobile Payment Systems in Malaysia: Its Potential and Consumers' Adoption Strategies

Mobile payment (M – payment) is a point of sale payment made through mobile devices, such as cellular telephone, Smartphone or other devices, either to direct purchase or to authorize payment for good and services. For example, we can pay our restaurant bill using our cellular phone without having to queue up.

Furthermore, we can use m-payment to purchase digital goods like ring tones, games, wallpaper for mobile and even booking cinema tickets. The payment can be made through SMS based transaction payments or mobile web payment (WAP).Wireless Application Protocol (WAP) is an open international standard that enable the application layer network to communicate in a wireless communication environment. It allows the cellular phone or PDA to access to the Mobile Web.

So, how does it work?

“Your mobile phone is your credit card”.

We can make our payments with just a simple click on our cell phone that acts as a Mobile Wallet that function as a payment service provider to enable us to make payment wireless for purchases of goods and services. Mobile Wallet users are required to reload their wallet account.

Just imagine, if one day we forgot to bring our wallet and yet we can still pay for our bus ride or buy a drink from a merchant that accept mobile payment. Mobile money, on the other hand, is a PIN-based mobile payment solution. It allows the registered users to pay for goods and services using only a mobile phone coupled with a 6 digit security PIN (Personal Identification Number) via SMS.

By having mobile money, it will encourage more consumers to shop online. It will also encourage more merchants to adopt online selling as an extra sales channel to help them sell more of their goods and services. This will definitely boom up the e-commerce industry in Malaysia.

Potentials
The mobile payment industry will continue to experience steady growth and is expected to increase in the future. The innovation of Mobile payment has indeed brings a lot of benefits to users.

1. Convenience. The user can easily pay up their bills, top up phone credit via the mobile phone. Although users do not have cash in hand, the can still pay up their bills by having their mobile wallet without having to search for nearest ATM machine.

2. Time saving. Users are more comfortable towards the use of Mobile payment because it can save the users’ time. For instance, in a restaurant, users no longer need to waste time queuing up to pay their bills as they can settle it though mobile payment.

3. Data security. Mobile payment system assures the safety of data for users. The payment is secured by a strong pin fraud protection patent which provides security and blocking the activities of hacking the password of the user

Consumers' Adoption Strategy

There is no doubt that mobile payment has brought financial freedom to users as they do not have to carry money on hand. In order to encourage more people to start using mobile payment, the company should:

1. Educate consumers on how to use mobile payment and learn the benefits of using it. This can be done by introducing mobile payment trough advertisements or posters.

2. Enhance security and confidence to mobile users. Security is the users’ main concern. The company should design an efficient security system to ensure the safety of the users’ personal information such as their password.

3. Maintain customer loyalty by rewarding the user if they reach a certain level of purchasing. For example, Hotlink company is adopting this strategy by giving extra credit to the user when their accumulate points.

4. Collaborate with more companies and bank to widen the ability to pay via mobile. This is done in order to improve the convenience of the consumers.

In conclusion, despite the positive projections, the security concern and undefined areas in banking regulations remain as challenges for mobile payment. The company and the users of mobile payment have the responsibility to face the challenge and overcome the problem of mobile payment system. If the system can be managed in more effective-way, it will greatly improve our standard of living.

Relevant Links:

http://searchmobilecomputing.techtarget.com/sDefinition/0,,sid40_gci772807,00.html

http://en.wikipedia.org/wiki/Wireless_Application_Protocol http://www.neowave.com.my/mobilemoney_overview.asp

http://egnge.blogspot.com/2008/06/mobile-payment-system-in-malaysia-its.html