Mobile Payment System in Malaysia : Its Potentials and consumers adoption strategies

Cash payments in Malaysia still account for a large portion of the number of transactions in the economy. In order to take advantage of the technology and innovation wave, it is expected to move towards more efficient payment modes. One of the efficient payment modes is mobile payment .According to research, mobile payment usage via a mobile enabled payment mechanism is expected to be used by 1.4 billion people by 2015.Mobile payment is a point-of-sale payment made through a mobile device, such as a cellular telephone, a smart phone, or a Personal Digital Assistant (PDA).

Potential Mobile payment system in Malaysia:
Bank Negara Malaysia sees tremendous promise in mobile telecommunication networks as an electronic payment channel since mobile phones are already in the hands of most Malaysians, with 88% (25 million) of the Malaysian population subscribing to mobile phone services. Moreover, mobile phones are integrated into consumers’daily lives, so there is potential to develop a robust business model around mobile payments. Mobile payment also acts as an efficient payment mode which can increases operational efficiency, simplicity and convenience at minimal cost for the public.

Consumers” adoption strategies:
One of the function of mobile payment system is to enable consumers to pay for goods and services at anytime, anywhere using only a mobile phone coupled with a 6-digit security PIN (Personal Identification Number) via SMS (Short Messaging Service).For example, Mobile Money is a PIN-based Mobile Payment Solution designed by Mobile Money International Sdn Bhd .It functions like a Credit Card and debit card which address the limitations and bottlenecks created by cash, cheques and credit cards and gives the freedom to shoppers to buy products online and pay the merchant using his/her mobile phone without being physically present at the store.

Lastly, the current mobile payment options are not fully functional, in the sense that they have not been made completely secure and are inconvenient in certain situations, so, for mobile payment system in Malaysia to succeed, there is a need to strengthen consumer confidence in safety, security and reliability of its networks as a means for consumers to access financial services. I believe that in the near future Mobile commerce will eventually replace the existing E-commerce systems.

Reference:
1. Mobile money
http://www.neowave.com.my/mobilemoney_overview.asp
2.Zeti Akhtar Aziz: Towards a more efficient payment system – electronic payments
http://www.bis.org/review/r080605d.pdf