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

Mobile payment (also referred to as mobile web payment or WAP billing) is a point-of-sale payment made through a mobile device such as mobile phone, smart phone, personal digital assistant (PDA) or other such device. Mobile payment can be used to purchase any number of digital or hard goods, such as

• Music, videos, ring tones, games, wallpapers and other digital goods.
• Books, magazines, tickets and other hard goods.

There are two primary models for mobile payments:

• Premium sms based transactional payment
• Mobile web payments ( WAP)

Premium sms based transactional payment is where the consumer sends a payment request via an sms text message to a shortcode and a premium charge is applied to their phone bill. The merchant involved is informed of the payment success and can then release the paid for goods. Another models for mobile payments, Mobile web payments (WAP) is where the consumer uses web pages displayed on their mobile phone to make a payment. This process is quickly replacing premium SMS based transactional payments for digital content and also enables the sale of physical goods. Using a familiar web payment model gives a number of proven benefits:

1. Follow-on sales where the mobile web payment can lead back to a store or to other goods the consumer may like.
2. High customer satisfaction from quick and predictable payments
3. ease of use from a familiar set of online payment pages

Mobile money international sdn bhd is one of example in Malaysia uses mobile payment system. Mobile money provide merchants and consumers with a convenient and secure mobile payment which provide no minimun montly transaction, no rental fee, no merchant account required and super low transaction fee at 1.5%. Besides that provide safe and secure, with mobile money, merchants do not have to be concern of cash or cheque and credit card handling problems or fraud.

Step Pay by Mobile Phone Number (Applies to customer purchase from merchant's brick-and-mortar store or Remote Payment) Customer choose to pay via Mobile Money for the goods and services from participating merchants. Customer gives merchant his/her mobile number via phone, fax, email etc. Merchant can bill the customer via IVR, Mobile Money website or SMS. When merchant requests for payment with customer's mobile number, Mobile Money sends an SMS with a Bill Reference Number to customer requesting customer to to reply with their 6-Digit Security PIN to approve the payment. (Refer to Sample Screen P1.1 ) P1.1: Customer Receiving Payment Request via SMS from Merchant. Screen 1 and 2 are showing messages from 1 SMS Only. Customer authorizes payment by replying the SMS with the Bill Reference Number and customer's 6-digit SECURITY PIN. (Refer to Sample Screen P1.2) Mobile Money authenticates customer's SECURITY PIN and requests for bank approval on transaction. (In this illustration, 001 is the Bill Reference Number while 123456 is the security PIN. In simpler terms, 001 means it is the 1'st SMS request for payment, 002 means the 2'nd, 003 means the 3'rd and the number increases. ) P1.2: Customer Replying the SMS with their PIN CODE. Upon receipt of bank's confirmation to debit customer's mobile credit account or mobile Debit account, Mobile Money will send a payment notification with details to merchant as well as customer. (Refer to Sample Screen 1.3) P1.3: Customer Receiving Notification from Mobile Money. Merchant can deliver the goods / services.