Mobile Payment Systems in Malaysia: Its Potentials and Consumers’ Adoption Strategies

Mobile Payment Systems
Its Potentials and Consumers' Adoption Strategies

Mobile payments are payments made using mobile handsets and other devices, either to directly purchase or to authorize payment for goods and services. Such devices are playing an increasing and evolving role in the wider development of electronic payment systems around Asia Pacific.

The uses of mobile payment system are money transfers person-to-person (C2C) and to businesses (C2B), buying ring tones, concert tickets, taxi and parking payments, credit card/checking transfers, delivery/mobile business payments, music (content), gift cards.

Easy payment translates to larger sales and a greater instance of impulse purchasing. We all know that if you make the purchasing process easy and remove any thought of how much you are spending then the tendency is to spend more. Credit cards have been a boon to impulse spending. This has been a real plus for merchants as it has enabled the public to have a quick, easy, efficient and cashless way to make purchases. The move from cashless to cardless is the next logical step in payment evolution. The rise of the cell phone as a key piece of personal technology will continue to grow; its use as a payment device seems an inescapable and inevitable extension to its utility.

The payment industry and mobile phone manufacturers are looking to use near field communication (NFC) as the base technology. NFC technology is an extension of RFID that combines a smart card interface and reader into a single device. NFC in mobile phones is likely next in line in the evolution for mainstream payment systems. Long term, all phones will have a NFC chip built into the phone.

Maxis Communications Berhad is currently trialling a mobile phone multi-payment service incorporating credit card and prepaid transit payments with Maybank, Visa International and Touch ‘n Go. Maxis "Touch to Pay" employs Near Field Communications (“NFC”) technology which leverages on a short-range wireless connectivity standard embedded in mobile phones.

Maxis also plans to offer a special user interface that offers an array of functionalities which will allow customers payment details, credit balance and recent transactions on the mobile phone screen at any point in time. Upon successful completion of the ‘touch to pay’ trial and commercial roll out next year, Maxis also plans to expand the NFC application in the area of “service discovery”, which will enable mobile phones to read “smart posters” implanted with Radio Frequency Identification (“RFID”) Tag. This will open up a new information channel for customers to gain access to bus routes and timetables, special offers and coupons at selected retail outlets.