The potential and consumers' adoption strategies of mobile payment system in Malaysia

The meaning of the mobile payment is allows you to make payments to selected merchants by using your mobile phones. As mobile payment has become more and more popular, consumer not only can pay their bill and purchase of goods and services among the cashless transactions, it also can enjoy the benefits of mobile payments by register and open an account with mobile payment service providers. But the important is your mobile phone or smart phone must provide a support for GPRS/ GSM.

First Mobile Payment System

Malaysia’s first mobile payment system was launched in lately November 2001, TeleMoney, it is the first mobile system that provide service via multi-channel access for Internet and wireless transaction. Through the TeleMoney, it can connecting to a credit card , debit card, stored valued card, bank account or even the phone account. Besides that, there is a System@Work which is offer Internet and mobile commerce services perform as a master merchant while Hong Leong Bank is acts as a settlement, clearing and payment bank for the service in Malaysia.

Beside that, some of the mobile payment system available in Malaysia is Mobile Money and SCAN's Mobile Payment System. Mobile Money is a PIN-based Mobile Payment Solution designed by Mobile Money International Sdn Bhd to address the limitations and bottlenecks created by cash, cheques and credit cards. It allows registered users to pay for goods and bills at anytime, anywhere using only a mobile phone coupled with a 6-digit security PIN (Personal Identification Number) via SMS (Short Messaging Service) or MM ATM application. (For more details about MM ATM, please visit here)

World’s First Contactless Mobile Payment System Launches in Malaysia

In April 2009, contactless mobile payment service utilizing Near Field Communication (NFC) technology was introduced by Visa, Maybank, Maxis and Touch n' Go. And yet, Maxis has launched an integrated mobile payment service, Maxis FastTap that uses near field communication (NFC) technology.

NFC is a short-range wireless technology that allows communications between devices at close range. As an open platform technology, NFC offers high levels of interoperability between devices and readers and is now the global standard for contactless mobile payments, with a wide range of features that allows credit card, debit card, ticketing and transportation payments to be integrated into a mobile phone.

Maxis FastTap is an integrated credit card and transit payment applications on a Nokia 6212 classic device. With using Nokia 6212 classic phone, consumer enables to purchase goods and services at more than 1,800 Visa paywave merchant locations.


In conclusion, mobile payment services in fact have great potential and advantages. When a merchant has subscribed to mobile payment instead of credit card payment system, it can save more on maintenance cost and startup fee. Merchants can also make an extra sale through offline network. On the other hand, it also brings convenience to consumer such as consumer can enjoy with low-value transaction over such non-traditional means.

Electronic Currency

This week I would like to introduce to you the "electronic currency". It is widely used in nowadays world. But what is electronic currency? And, what is it used for?

What is electronic currency?

Electronic currency also known as electronic money, digital money, e-money and so on. Electronic currency can only be exchanged electronically. Typically, it involves the use of Internet and digital stored value system. It is a computerized money system and use to replace the current physical paper money currency. There are some success examples of electronic currency which are implemented in Hong Kong's octopus card system and Singapore's ezlink card system.

Advantages of Using Electronic Currency

There are many advantages for using electronic currency. The first advantage, electronic currency is cheaper. It allows transactions take place at a low costs and even the most expensive digital currency cost lower than the credit card. For those transactions which have high cost previously due to time, effort, and money are now feasible by using electronic currency since it is cheaper. Besides that, the people who are using the electronic currency can make a significant savings compare to those who always use the credit card.

Another advantage is electronic currency is faster. Electronic currency make a instantaneous and nonconvertible transaction that solve the vulnerable position of the merchant since the credit card at their store can be stolen by hacker. If you want to transfer the money to your friends or family, with a few seconds the transaction is done and your friends or family can withdraw the cash from the ATM. That's fast.

Electronic Currency is international. Credit card or paypal are hard to applied in different country. Therefore, electronic currency acts an important role in helping the international enterprenuer to sell their product or service to worldwide. It is because electronic currency make an instantaneous transfer of money anywhere in the world with the easily and quick convert to the cash of any country.

Issues of Electronic Currency

Eventhough, there are many advantages that provided by electronic currency, but still there are some issues that arise from electronic currency such as how to levy tax, the possible ease of money laundering, exchange rate instabilities and shortage of money supplies.

Future Evolution

The future focus of the electronic currency developement are:

1. Being able to use it through a wider range of hardware such as secured credit cards
   
2. Linked bank accounts that would generally be used over an internet means, for exchange with a secure micropayment system such as in large corporations

The application of pre-paid cash card for consumers

The pre-paid cash card is more or less the same look like credit cards or debit cards and they offered the same ability to purchase products and services. The difference between pre-paid cash card and debit cards or credit cards is that pre-paid cash card can only spend the balance that was preloaded onto the card.



For example, Touch'n Go provide a standard card Touch 'n Go cards which fare structure currently available for adult fare for standard class vehicles .



Since there is no credit or overdraft facility, there is no risk of running into debt using pre-paid cash card, especially for those who lack of discipline of the know-how sense to manage their money. Pre-paid cash card is a good way to control yourself and budget for spending.

With a pre-paid cash card, those wih poor credit or too little money to meet bank's minimum account balance requirement can participate in the retail transaction. Tips for pre-paid cash card user is that before using pre-paid cash card, make sure to know your current balance before you shop, make note of your pre-paid cash card's account number and custormer service number and keep it in a safe place.

Pre-paid cash card can topping up your mobile phone, paying bills, internet shopping, do it as a replacement for travellers cheques, buying groceries and petrol and even going for travel.

Credit Card debts: Causes and Prevention.

Most of the banks encourage their customers to take their issued credit card to make transactions. The credit card is so convenience that owners no need to pay immediately while purchasing and pay at the end of the month. Credit card debt occurred when the owner using credit card to make purchase.

In year 2006, there are 700 thousand Taiwanese unable to pay their credit card debt, NT$ 1 million for each people. This happen indicated that the credit card debts were a serious issue for all credit card owners.

Encouragement from Banks
Most of the banks issue lot of credit cards for their customers. Banks always encourage consumers to make transaction via their credit cards. All these cause credit card holders increased dramatically.

Poor finance management
There is so convenience to purchase by using future money without developing any plan. Thus, people keep purchasing and do not aware of amount of their spending. Therefore people realized that they are carrying a huge debt after receiving monthly statement.

Cycle effect
Rely on financial income is the main way for people to pay their debts. After paying for the debts, the remaining incomes are most likely to enough for daily use. Therefore people will continually use credit card and fall into a cycle of creating and paying of credit card debts.

Once the debts excess their income, the interest of debts or late payment charges are coming. These extra charges make the debts larger, like snow ball effect. People are work to pay for debts and it’s never end.

Finally, there were so many people were filed for bankruptcy after they faced economy crisis, inflation, recession or unemployment.

To prevent credit card debts affect our life, there are some suggestion as below:-

Budget planning
Planning own spending can helps people to manage their own finance. It is always a good practice to create a budget to limit spending by using credit card. With the budget, people are able to learn self-control from consuming and able to overcome their debts. Thus, huge debts would not be created.

Downsize credit limit
People should not always think about there is good to have an unlimited credit card. In order to prevent non-payable credit debts, people should dealing with their creditors to downsizing their credit limit. People are then limited to spending.

Critical Thinking
Each people are advised to have only one or two main credit cards. People are always like to have as many credit cards as possible to express their financial position to others. Furthermore, people always like to use various credit cards to make transaction with low credit limit. These will increase the complexity of financial management and also the charges of cards.

Conclusion

Credit cards are giving us many conveniences to use credit money to purchase something. It provides many positive impacts for our life. However, it could also bring many and serious negative impacts to us if we without appropriate and correct prospective on using credit cards.

References:
(1) http://www.mozdex.com/prevent-credit-card-debt/

(2)http://www.streetdirectory.com/travel_guide/145666/debts_loans/debt_prevention_and_management.html

(3) http://www-creditcarddebt.com/credit-card-debt-law/arlington-va-bankruptcy-lawyer-bankruptcy-abuse-prevention-178.php