Cash payments in Malaysia still account for a large portion of the number of transactions in the economy. Going forward it is expected that its use will level off and stabilise with the increased use of electronic means of payments. Credit cards, ATM cards, debit cards including the e-purse application embedded in the MyKad are among the card payments possibilities in Malaysia. The increased use of cards is an international trend and is expected to gain significance in Malaysia. Giro transfers, other credit transfers and direct debit are also gaining significance by both individuals and businesses. Finally, Internet banking has also begun to experience stronger growth.
Mobile payment systems own a good potential in Malaysia and it can be seen below. Bank Negara Malaysia sees tremendous promise in mobile telecommunication networks as an electronic payment channel since mobile phones are already in the hands of most Malaysians, with 88% of the Malaysian population subscribing to mobile phone services. With 25 million mobile phone subscribers in Malaysia, there are immense opportunities to leverage on mobile phones to accelerate the migration to electronic payments, to widen the reach and appeal of electronic payment services, to deliver innovative mobile payment products that offer speed, simplicity and convenience at minimal cost for the public, as well as to provide an efficient and cost-effective method of delivering financial services even in the remote areas. Also of significance is the high level of financial inclusion in Malaysia. With a population of 27 million, the banking system in Malaysia has 55 million deposit accounts indicating that a high percentage of the population has deposit accounts with the banking system. This is confirmed by a survey of a sample of 5,000 in 2003 that indicated 97% of those surveyed have a bank account. There are now only 460,000 subscribers for mobile banking and payment services. This represents only 1.8% of the 25 million mobile phone subscribers in the country. There is, therefore, a significant untapped and potentially lucrative market for mobile payment and banking services.
Following are some examples of mobile payment systems:
Mobile money wallet
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 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 via SMS. 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. In order to pay using Mobile Money, a shopper must have a savings, current or credit card account with participating banks. The shopper will be billed by the bank accordingly by month's end. In addition, it functions as a Debit Card if it is tied to shopper's savings or current account. The amount will be deducated instantly from the account upon successful transaction.
TeleMoney
TeleMoney is an innovative mobile payments service that enables the use of the mobile phone as an identification and authentication device for making convenient and secure payments. TeleMoney can be used over multiple channels including Internet, mobile and proximity (over-the-counter) and it supports multiple payment choices.
By:
Teng Yann Guan 0701652
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