Business

Saturday August 1, 2009

Payment via mobile catches on

By DALJIT DHESI


PAYMENT through mobile phones is fast catching on in Malaysia, thanks to the high mobile penetration rate and quest for convenience. Realising this, many banks are making a beeline to offer mobile payment services.

On a similar note, telecommunication companies are also forging partnerships and looking at ways to offer new mobile payment services in line with growing demand for such services. In addition, credit card companies and other service providers are also offering these services.

The Malaysian Communications and Multimedia Commission’s (MCMC) latest published handphone users survey states the top three forms of payments via handphones by consumers are payment of bills, remittance transfers and purchase of media/content.

According to Bank Negara’s Financial Stability and Payment Systems Report 2008, mobile banking subscribers nearly doubled from 0.3 million as at end-2007 to 0.5 million as at end-2008, while its transaction value rose from RM21.2mil in 2007 to RM71.5mil in 2008. This is mainly attributed to the launch of mobile banking services by financial institutions, new services offered such as interbank fund transfer and corporate bill payment services for businesses to make payments to their suppliers via the mobile phone.

The adoption of mobile payment also grew by 197.4% and 163.8% in terms of volume and value respectively. This was due to the higher usage of mobile e-money and mobile debit applications, whereby customers can make payments using their mobile phones via a direct debit to their bank accounts.

Merchant acceptance for such payments grew by 11% to 12,512 merchants as at end-2008.

Citibank Bhd consumer e-business head Roy Heong says that over the last two years, the bank has seen an average annual growth of over 300% in terms of users and transactions for mobile payment. With this service, Citibank customers can pay bills, reload prepaid values, remit international fund transfers, conduct business-to-business payments, and check banking transactions or details via their mobile phones.

Standard Chartered Bank Malaysia Bhd, after launching the country’s first smartphone technology mobile banking in April 2007, has since evolved to full mobile Internet capability with the launch of its “mobile browser banking” in the first quarter of 2009.

Mobile browser banking allows mobile users which has an Internet browser in their mobile phones to make payments and conduct transactions.

Standard Chartered head of consumer transaction banking Choong Wai Hong says its online banking and mobile banking customer base has grown 75% from 2008 to 2009.

On the other hand, while OCBC Bank (M) Bhd head of delivery and franchise Foo Seik Chiang says there is a growing trend of customers using mobile phones to make payments, the growth in new users is not that significant to be concluded as a rising trend. However, he reckons that the trend will catch on sooner or later.

Still, there remain many issues that need to be addressed. DiGi Telecommunications Sdn Bhd head of strategy and new business Noelle Tan points out that factors such as security measures, pricing and usability of service needs to be addressed before a mass adoption of such services can take place.

Aside from remittance, DiGi also offers personal accident (PA) insurance via easy SMS activation. The telco last year introduced its free RM10,000 PA insurance to its customers. Earlier this year, the company enhanced its offering and gave customers the opportunity to purchase higher insurance coverage at affordable prices.

With the recent launch of AirCash, Celcom (M) Bhd CEO Datuk Seri Shazalli Ramly adds that customers are now able to reload airtime, transfer funds to other AirCash users and even remit money to Indonesia.

In the near future, they would be using AirCash to pay utility bills, do banking transactions, and pay for goods and services, notes Shazalli.

Although this service is relatively new, the company foresees an exponential growth in the years to come similar to mobile broadband. All new services will need some time for customer awareness and education, he stresses.

Apart from offering various mobile payment and transactions, Malayan Banking Bhd (Maybank) senior executive vice-president and head of consumer banking Lim Hong Tat says the bank also offers customers its latest value added services launched in July called M2U Map on iPhone.

It allows mobile users to locate the Maybank ATMs and branches closest to where they are and see the distances to the nearest bank ATMs and branches and navigate to an ATM or branch location using the built-in maps.

Last year, Maybank commanded 44.6% of market share of the total registered mobile banking subscribers of close to 530,000.

On the charges or fees for mobile payment, Heong says any charges for mobile content or usage will have to reflect both the economic situation as well as value that consumers get from it.

The higher the value add of a certain product or service, the more consumers will be willing to pay for it as it benefits them, he adds.

With strategic partnerships and more innovative products and services, Heong adds that there are opportunities to deliver cost savings to customers.

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