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

Mobile payments are defined as the use of a mobile device to conduct a payment transaction in which money or funds are transferred from a payer to a receiver via an intermediary, or directly without an intermediary

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.

Adoption of mobile and electronic payments systems:

1.Relative advantages of mobile payment systems:Mobile payments provide consumers with everywhere purchase possibilities, timely access to financial assets and an alternative to cash payments.

2. Compatibility: Compatibility captures the consistency between an innovation and the values, experiences, and needs of potential adopters.

3. Complexity: Complexity and problems with usability have contributed to the low adoption of a variety of payment systems, including smart cards and mobile banking.

4. Network externalities and creation of critical mass: Payment systems exhibit network externalities as the value of a payment system to a single user increases when more users begin to use it.

5. Costs: There is a direct effect on consumer adoption if the cost of a payment transaction is on to customers. In order to gain a competitive advantage, a shoppers in electronic channels should attentive to price the transaction costs of mobile payments to be low enough to make the total cost of purchase competitive with the physical world prices.

6. Payment system security and trust in payment systems providers: In a mobile environment, lack of consumer perceived security and trust in vendors and payment systems is one of the main barriers to electronic and mobile commerce transactions.