Mobile payment systems in Malaysia: Its potentials and consumers' adoption strategies

Mobile payment is new and rapidly-adopting alternative payment method. Instead of paying by cheques or credit cards, a consumer can use a mobile phone to pay for wide range of services and goods. The payment can be made either to directly purchase or to authorize payment for goods and services. Such devices are playing an increasing end evolving role in the wider development of electronic payment systems around Asia Pacific, which includes Malaysia.

Malaysia's mobile payment market has developed more quickly, but less organically than other country such as Thai market. Emerging services have received government support, but uptake in the market has been limited. Existing services are focused predominantly on bill payment and m-banking, growing slowly into m-wallet services, remittance and top-up/transfer offerings.

One of the most popular mobile payment systems is the Mobile Money (MM Wallet). Mobile Money is a PIN-based Mobile Payment Solution designed to address the limitations and bottlenecks created by cash, cheques and credit cards. It unlocks the power of the mobile phone to make payments, allowing registered users 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). This 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.

After many years of trials and errors in developing the finest mobile payment system, Maxis Communications Bhd, in collaboration with Nokia, Visa, Maybank and Touch 'n Go, has announced the launch of Maxis FastTap - calling it an integrated mobile payment service that utilises Near Field Communication (NFC) technology. With the service, customers can use their Nokia 6216 Classic phones to purchase goods and services at more than 1,800 Visa payWave merchant locations as well as pay for toll, transit, parking and theme park charges at over 3,000 Touch 'n Go points nationwide.

There are two elements to NFC technology — a tag, which is inside the phone and can store data and transmit it wirelessly, and a reader, which can access the information stored on the tag. The appeal of contactless mobile payments for consumers is especially apparent in high-speed transaction environments like car parks, toll gates, bus and train terminals, cafés and fast-food outlets, newsagents, supermarkets and petrol stations. This technology will thus increasing the popularity of using mobile payment in Malaysia.

The San Francisco coffee outlet at KLCC is already equipped with the Visa payWave that allows for mobile payments via NFC

The potential for this market is quite big, because it is very convenient to use mobile payment. The mobile payment providers have a large market share to be grab on. This mobile payment is still new and developing in Malaysia. It has potential to continue to grow as consumer’s confidence on mobile payment increased. Mobile payment providers have most potential for growing.
To put it simple:

1. Market still at developing stage
2. Many mobile phone users
3. Low competition

Strategies:

1. Educate consumers about mobile payments, how to use and introduce its functions (e.g. bill payment, mobile purchase)
2. Enhance security and confidence to mobile users
3. Collaborate with more banks and companies to widen the ability to pay via mobile at the same time it helps to increased customer’s satisfaction and confidence
4. Maintain customer’s loyalty

Here some useful reference websites:

1. Maxis FastTap User Guide
2. Maxis Launches FastTap NFC-based Mobile Payment Service
3. Visa Rings In On Mobile Payment Space
4. Mobile Money (MM) Overview