Mobile Payment Systems in Malaysia: Its potentials and consumers' adoption strategies

Mobile payment systems have been developed in recent years to facilitate purchases of products, services, and electronic commerce at physical points of sale. Nowadays, consumers used relatively inexpensive mobile phones as digital cameras, personal audio players, date books, games, calculators, and clocks.

Maxis FastTap is an integrated mobile payment service established under a partnership with Nokia, Visa, Maybank and Touch ‘n Go. Customers who sign up can use the Nokia 6212 classic device that the NFC (Near Field Communication) system allows users to purchase goods and services at Visa payWave merchant locations for paying toll, parking and theme park charges.

In Malaysia there are several companies that launched mobile payment systems such as Celcom, Maxis, Digi, TMtouch, Maybank, Paypal, Mobile Money International Sdn Bhd and mobileExec Sdn Bhd.

There are several strategies for consumer and its potentials:

Complexity

Complexity and problems with usability have contributed to identify the low adoption of different payment systems, including smart cards and mobile banking. The easy of using has affected consumer adoption of Internet payments and WAP financial services that make purchases and for merchants to receive payments using a mobile phone. Mobile payments are expected to increase consumer convenience by reducing the need for coins and cash in small transactions and increasing the availability of purchase possibilities.

Costs

The cost of a payment transaction has a direct effect on consumer adoption if the cost is passed to customers. The consumer’s intention to WAP(Wireless Application Protocol) shopping shows the strongest characteristic that differentiates the high and low intention groups was price consciousness. As shoppers in electronic channels are considerate to transaction costs of mobile payments should be low enough to make the total cost of the purchase competitive with world prices.

Payment system security and trust in payment systems providers

Nowadays, consumers show sensitive awareness to security and privacy issues. Hence, key requirements for secure financial transactions in electronic environment include confidentiality, data integrity, authentication and non-repudiation. Other security factors important for consumer adoption are anonymity and privacy which relates to use policies of customer's personal information and purchase records

Ownership of the Customer Relationship

Wireless carriers, financial institutions, and card associations must decide who owns the customer relationship, including the billing and collection process. It is important to determine the selected models that satisfy the customer. The parties should have a clear understanding of consumer preferences that should be a key consideration in the decision‐making process. For example, consumers are more comfortable providing financial information to their banks.

NFC Mobile Payment & Promotions

Resource Link:

http://www.telecoms.com/10397/maxis-brings-nfc-payments-to-malaysia

http://www.pcworld.com/article/162850/visa_makes_nfc_payment_commercially_available.html?tk=rss_news

http://project.hkkk.fi/helsinkimobility/papers/Mobile%20Applications_2_3.pdf

Credit Card Debt : Cause and Prevention

Credit card has commonly been used in our life, not only adult but also for student. Undoubtedly, it has given a lot of conveniences to its users. However, in certain circumstances, it creates irritations. Put aside credit card fraud which is a serious crime, the credit card debt has become a severe issue and it is the major cause of bankruptcies each year.

Causes:

Missing payments or late payments
The fastest way to get into credit difficulties is by not repaying the minimum payment required, over the limit fees, high annual percentage rates, and universal default. Debts accumulate increase with interest and penalties for late payment had made the total amount due become larger. Even worse, cardholder will be forced to go bankrupt.

Poor money management
Poor money management is one of the best reasons why so many families accumulate lots of debt. Not having a monthly spending plan and not keeping track of the monthly bills makes one unaware of where the money is going. While the money is going towards purchasing useless items, he might need charging the necessary purchases on credit card.

No saving cushion
When people using credit cards, they would like to use the future money and have not extra money to save in bank. When people are spending more than their income, they will be very hard to manage their savings accounts. Besides, the important topics such as saving and investing one’s personal finances are not taught in school. People who are lack of such knowledge may easily become the next victim of credit card debt.

Prevention:

Making a budget or financial planning
The first step in setting up a budget is determining your monthly income and needed expenses. As part of these monthly expenses, figure in 5-10% of your income to set aside for emergencies, long range savings such as a retirement account and short term savings. This can help us to perceive that we will not overspending our budget that we have set before and prevent from the debts. Use the card to obtain a purchase that you can afford provided you can pay off the cost over time or spend by using a debit card.

Pay on time
Punctually make the payment to anyone include car and house payments to avoid raising your interest rate if you are late paying any creditors. Besides, you need to pay at least more than required minimum payment for emergency fund or you can set up a Direct Debit for the minimum amount as much as possible of the remaining balance to keep it low.

Early education
The best method for prevention is teaching your younger generation all about money before they even qualify for a credit card. Let they know the causes well and how to effectively manage their financial by using the credit card. Related Link:

http://www.novanthealth.org/eap/daily_issues/credit_card_debt.jsp

http://www.credit-land.com/articles/articles_page_68600_1881780_120.php

http://www.ehow.com/how_2038727_avoid-credit-card-debt.html?

The application of pre-paid cash card to consumer

Nowadays, card is one important thing in our life. Let introduce what is pre-paid cash card. Prepaid cash card is using our existing money, rather than using credit card, which we borrow the money and then pay it back later. Prepaid cash card draw funds from our bank account, usually a checking account. The value in the card will reduce each time the consumer uses it and the consumer can reload the card anytime.

An example of prepaid cash card is Touch ‘n Go. The credit card size smartcard made of plastic with microchip technology embedded in it. It is an electronic purse that can be used at all highways in Malaysia, major public transport in Klang Valley, selected parking sites and Theme Park. It only speed up the payment for low value and high frequency transactions, but also convenient the users for no need to wait for attendant to give you small change or wait in queue to complete the transaction. Besides that, users can reload at toll plazas, train stations, Automated Teller Machines, Cash Deposit Machines, Petrol kiosk and at authorised third party outlets. Other than that, now Touch n G has extended its uses in e-tailing which is the selling of retail goods on the Internet. There are some outlets having privileges for customer who pay by using Touch ‘n Go.

These cards are great because unlike regular credit cards you actually have to have the money before you can make a purchase. You deposit the money on the card and then use it. Once the money is used up you can’t make any more purchases. There are no over the limit fees. There is no chance of a returned check fee. Besides that, prepaid cash cards offer a perfect way to keep track of our spending, ensuring that you won’t overspend each month. Prepaid cash card is for those consumers with poor credit, they should not give up. The consumers get many chances to repair their credit record. Eventually the credit record is wiped and the consumer ends up being able to get whatever they want.

Related Links:

http://en.wikipedia.org/wiki/Touch_%27n_Go

http://www.economywatch.com/credit-card/prepaid.html

http://www.findcreditcards.org/type/prepaid.php