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

Malaysia being a country with over 25 million in population and 21 million mobile subscribers as at the end of year 2007, there is definitely market opportunity for mobile payment system.

The current mobile payment system that is available in Malaysia is Mobile Money (MM 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 allows 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.

In order to pay using Mobile Money, a shopper must have either a savings, current or credit card account with participating banks. It functions like a Credit Card if a shopper applies for a "Pay by Mobile Phone" credit card account (eg: Hong Leong Mobile Credit Card) and it functions as a Debit Card if it is tied to shopper's savings or current account.

In order to encourage consumers to adopt mobile payment system, we must know what are the advantages of mobile payment system. The following are some of the advantages of mobile payment system:

• Queue avoidance

• Enhanced payment instrument availability

• Complement to cash

• Digital content and services, e.g. ticketing

• Small value purchases at point of sale, e.g. vending

• Trust in m-payment service providers, e.g. Banks

• Can be use when suddenly need for payments

• Can be use when lack of other payment instruments

• Need to make payments remotely

Electronic Currency

Bitpass was an online payment system for digital content and services. Kurt Huang was a co-founder. Doug Knopper was hired as CEO in November, 2005. Bitpass was a California corporation with headquarters in Silicon Valley. It was founded in December, 2002 and partnered with major technology and financial services companies such as Microsoft, Paypal, the Royal Bank of Scotland and First Data.


On January 19th 2007, Bitpass announced that they were shutting down, and operations officially closed on January 26th 2007. No immediate reason for closure was given.
For the content buyer, Bitpass worked like a pre-paid telephone card: the buyer signed up for the service and put money into an account using a credit card or Paypal. This stored-valued amount could be used to purchase digital content or services.



Transaction fees were paid by the content provider. For payments under $5, the charge was 15% of the price paid by the buyer (Bitpass Professional merchant account fee).


There was a person named Winnie who worked for Bitpass before said that Bitpass was actually making pretty good money until stakeholders who were funding them pressured them to get out of the adult content business, neglect indeed content creators and spend all of their resources on going after big media.


Winnie further said that it was conceivable that a micropayments company that is allowed to grow organically can succeed, but when investors are knocking at your door offering tens of millions of dollars, it is very hard to resist selling out.

The Application Of Pre-paid Cash Card For Consumer

Pre-paid cash card is a stored-value card, which has monetary value loaded onto it and that is usually rechargeable. The monetary value of a pre-paid cash card is preloaded on the card.

A pre-paid cash card can be used to make purchases, either online or off-line. It can be used in the same way that credit card and debit card are used. Pre-paid cash card relying on the same networks as credit and debit card be, encrypted communications, and electronic banking protocols.

But there is one thing differentiate pre-paid cash card from credit card and debit card, that is, anyone can obtain a pre-paid cash card without regard to prior financial standing or having an existing bank account as collateral. One can start using a pre-paid cash card by just loading money onto the card at bank, post office, ATM machine and so forth.

There is a benefit when using the pre-paid cash card-no risk of running into debt. A card holder can only spend up to the amount loaded onto the card as there are no credit or overdraft functions provided for pre-paid cash card holders.

Examples of pre-paid cash card:

• Touch 'n Go card (Malaysia)-This card can be used in entire highways stretches in Malaysia with the familiar TnG and SmartTag sign marked on the road. Besides, it can also be used for public transportation and ticketless parking. And soon, using Touch 'n Go card to buy fast food in Malaysia will be a reality.

• Octopus Card (Hong Kong)- This card can be used in all public transport in Hong Kong. It can be used for payment at convenience stores, supermarkets, fast-food restaurants, on-street parking meters, car parks, and other point-of-sale applications such as service stations and vending machines. Besides, it can also be used for access control in buildings and for school administrative functions.

Applications of pre-paid cash card for consumer:

• Online shopping
• Payment for petrol
• Public transportation
• Payment for toll fare
• Bill payment
• People who are travelling in other country
• Topping up for mobile phone

To read more regarding Pre-paid cash card, please refer to the following links:

• http://en.wikipedia.org/wiki/CashCard
• http://en.wikipedia.org/wiki/Touch_n_go
• http://en.wikipedia.org/wiki/Octopus_card