Mobile Payment Systems In Malaysia : Its Potential and Consumer's Adoption

Introduction

Mobile payment systems or called as M-payment has been well adopted in many parts of Europe and Asia. It has emerged as one of the popular and convenient methods of payment. Mobile payment is a point-of-sale payment made through a mobile device, such as a cellular telephone, a smart phone, or a personal digital assistant (PDA). By using mobile payment systems, a person with a wireless device could pay for items in a store or settle a restaurant bill without interacting with any staff member. In addition, a consumer can use a mobile phone to pay for wide range of services and digital goods instead of paying with cash, cheques or credit cards.

Current Mobile Payment System That Are Available In Malaysia

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 allow customers 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.

In Malaysia, the major obstacles that faced by merchants who are doing online selling transaction is when selecting a payment gateway. The reason is because there are too few choices available, and worse, none of these limited choices are cost effective. However, Mobile Money has been addressed this problem, since it allows merchants to take online order without the need for online shopper to disclose their credit card information.

In order to pay using Mobile Money, a shopper must have either a savings, current or credit card account with participating banks such as Hong Leong Bank and Bumiputra-Commerce Bank. 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). 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 deducted instantly from the account upon successful transaction.

Maxis FastTap

Maxis FastTap is launched by Maxis Communication Bhd, in collaboration with Nokia, Visa, Maybank and Touch 'n Go. It is an integrated mobile payment service that utilizes Near Field Communication (NFC) technology. By using this, the customers can use their mobile phone such as Nokia 6216 Classic phones to purchase goods and services at more than 1,800 Visa payWave merchant location. In addition, customers also can pay for toll, transit, parking, and theme park.

According to Maxis, FastTap service marked a few "first-in-the-world" milestones for contactless mobile payments using NFC, a shot-range wireless technology that allows communications between devices at close range. Besides that, it is also the first global service that integrates multiple NFC applications for contactless credit card payment and Touch 'n Go electronic payment for transit, toll an parking payment on the same device.

Paymo

Paymo is the trusted mobile payments network that allows consumers anywhere in the world to buy online and pay with their mobile phone. According to research, more than 70 percent of the world’s online population has no credit card, but over 3 billion consumers own a mobile phone. By having this opportunity, Paymo opens the world of online commerce to these people, offering them the ability to buy online and pay using their mobile phone.

By using Paymo, it helps to simplifies and streamlines the e-commerce process for digital items such as virtual goods, video games, and applications for social networks and mobile devices. Furthermore, it eliminates the need for log-ins and passwords, remembering credit card numbers or setting up separate accounts to facilitate online transactions that are linked to a bank account or credit card. Moreover, it provides a trusted global payment system for online purchases that is fast, easy and secure.


The Current Customer Base and The Merchant
Current customers base who will used mobile payment systems in any transaction are those online shoppers who want a simple and secure method of payment that can be used in as many online shops as possible. Besides that, it also included business entity who may purchase goods or services from a merchant and teenagers as they cannot access regular financial services.

As for the merchant, it included those individual, business entity, hardware and/or software that receives a card number to facilitate a transaction, whether or not in exchange for goods or services. Therefore, it may be an online bookstore such as Amazon, an online auction such as eBay, or a local restaurant.


How to Encourage Customers to Adopt Mobile Payment Systems
To encourage more customers to adopt mobile payment systems, we can describe the relative advantages of mobile payment systems :

• Compatibility. Mobile payment systems are compatible with small value payments contemplating cash payments. For example, electronic ticketing such as car parking, public transportation, movies; mobile content such as music, games; small value payments at Point-of-Sales such as a chocolate bar or a newspaper on a kiosk and so on.

• Convenience & ease of use. Mobile payment systems will increase consumer's convenience by reducing the need for coins and cash in small transactions and increasing the availability of purchase possibilities. Besides that, there is no pre-registration and no new mobile software is required

• Time and place independent purchases. By using mobile payment systems, consumers can make their purchase anytime and anywhere without any restriction.

• Queue avoidance and speedy. With mobile payment systems, customer do not need to have to queue up when making their payment of purchase as they can just use their mobile phone. Moreover, by using mobile payment systems, most transactions are completed in less than 10 seconds.

Sources:

1. http://en.wikipedia.org/wiki/Mobile_payment
   
2. http://www.m-indya.com/shownews.php?newsid=38
3. http://blog.2experienceit.com/2009/04/09/maxis-fasttap-multipayment-mobile-service/
4. http://www.crunchbase.com/company/paymo
5. http://project.hkkk.fi/helsinkimobility/presentations/ExploringConsumer.pdf

The Threat of Online Security : How Safe Is Our Data

Nowadays, online security has become an enormous concern to people surfing the Internet and to people who are conducting business on the world wide web. Online security threats have continue to increase in number and sophistication ways due to the many people online via dedicated broadband connections and some folks remain online 24 hours a day. In addition, they propagate faster and more difficult to detect. We have all heard reports of and been affected by online viruses spread through emails, online business scams, online identity theft, and online sexual abuses. So, online security really refers to many aspects of out new online world.

Types of Online Security Threats

Computer Viruses and Worms
Everybody has heard about computer viruses and worms that can infect our PC and wreak havoc on our operating system or files, but very few of us have completely escaped from these forms of online threats. New forms of these threats emerge every day. These viruses and worms are insidious little programs that can take control of our system or email service and cause great annoyance if not damage.

Computer virus is a kind of malicious software written intentionally to enter a computer without the user's permission or knowledge, with an ability to replicate itself and thus continuing to spread. Some viruses do little but replicate others can cause severe harm or adversely affect program and performance of the system. Most common types of viruses are Resident Viruses which will permanent dwells in the RAM memory, Boot Virus which will affects the boot sector of a floppy disk, Macro Virus which will infect files that are created using certain applications or programs that contain macros, Polymorphic Virus which will encrypt or encode themselves in a different way every time they infect a system, and so on.


Meanwhile, computer worm is a self-replicating computer program. It uses a network to send copies of itself to other nodes (computer on the network) and it may do so without any user intervention. Unlike a virus, it does not need to attach itself to an existing program. Worms almost always cause at least some harm to the network, if only by consuming bandwidth, whereas viruses almost always corrupt or devour files on a targeted computer.

Source:http://support.microsoft.com/kb/129972


Spyware
Spywares began to show up on the Internet round about 1995, when the term was used to talk about hardware used for spying on other computers.

Today, Spyware attacks are becoming the most common online security threat that faced by most internet users. A Spyware is a software that installs on our computer via the Internet without our knowledge or consent. What is worse, is that the software will often record our activity in the Internet, record our personal information, take over some or a lot of our bandwidth on the Internet that making our Internet connection slow, direct us automatically towards websites where we might find oursleves downloading even more viruses and spywares and also divert advertising related revenues to another third person.

Personal details like bank account and credit card details especially those who are a user of e-banking facilities can become extremely vulnerable. These personal details can be used for identity theft purpose as well.

There are many means for a spyware to get into our computer. Sometimes, these spywares are part of some softwares which are available for download on the Internet. This is called 'piggybacking'. The spyware comes bundled up with the software and when we install the software, the spyware install itself on the computer. Usually, spyware are part of shareware programs that are available on the Internet.

Source:http://searchsecurity.techtarget.com/sDefinition/0,,sid14_gci214518,00.html


Identity Theft
Identity theft is a serious crime affecting millions of people a year and accounting for the loss of billions of dollars every years as well. It occurs when someone uses our personal identifying information such as our name, social security number, or credit card information to pretend as us. The identity thief does this for his own personal gain at the expense of his victim.


An identity thief may use our information to:

• Open a new credit card, phone, or utilities account in our name and then run up the bills without paying by them.
• Open a bank account and write bad cheques in our name, apply for a loan in our name, or use our bank information to drain our account.
• File a fraudulent tax return or apply for government benefits in our name.

There are several ways that identity theft will happen towards the online users. For example, Phishing, this is when online user was contacted via email or phone by someone that asking them to "verify" specific information related to their credit card, pay pal or bank account. The other examples are that stealing mail, computer viruses, intercepting data from insecure networks or sites, data breaches at companies that have your information, and so on.

Source:http://en.wikipedia.org/wiki/Identity_theft


Computer Hacking
Computer hacking is basically an alteration of computer hardware and software in order to accomplish a goal which is outside of the creator's original purpose. Computer hacking is both art and science for the people who try to break into protected or unprotected networks.


Generally, hackers tend to steal personal information, change a corporation's financial data, break security codes to gain unauthorized network access, or conduct other destructive activities. Computer hacking invariably involves some degree of infringement on the privacy of others, breaching the network security, and thus causing damage to confidential files, web pages or software. In addition, it may also involve downloading or alteration of files through unauthorized access.

Basically, there are 3 types of hackers. A white hacker is the one who breaks security for non-malicious purpose. These purposes may range from testing the security system, to finding the major loopholes in the network. The second category includes the black hat hackers, who generally subvert computer security without authorization, with the help of viruses and various other hacking tools. These hackers use technology for vandalism, credit card fraud or identity theft. The third category includes grey hat hackers, whose domain of work lies mid-way between black hat and white hat hackers. They are ambiguous ethics and work on the borderline of legality.

Source:http://www.wisegeek.com/what-is-computer-hacking.htm


Gumblar
Gumblar is a complex new malware attack which is making way into certain websites and setting infection records. It carries a dangerous payload and attacks by injecting malicious JavaScript codes into certain components of the targeted websites. An online user can become a victim of the attack simply by visiting one of the infected pages.

Once the website becomes vulnerable, the malware makes changes in the user's access credentials and the site can then be accessed by the attacker even after the user has changed passwords. The malicious code is difficult to detect as its scripts are altered from site to site and even from page to page. So, it stop the administrators from automatically searching out and deleting the scripts.

Source:http://www.v3.co.uk/vnunet/news/2242317/gumblar-attack-explodes-web


Trojan Horse Virus
A Trojan Horse virus is a common yet difficult to remove computer threat. It works by hidding within a set of seemingly useful software programs. Once executed or installed in the system, this type of virus will start infecting other files in the computer.

A Trojan Horse virus is also capable of stealing important information from the user's computer. It will then send this information to Internet servers designated by the developer of the virus. The developer will then be able to gain a level of control over the computer through this Trojan virus.

A Trojan Horse virus can spread in a number of ways. The most common means of infection is through email attachments. Once the user open the attachment, the Trojan Horse virus immediately infects the system and performs the tasks. Another method is via chat software such as Yahoo Messenger and Skype. Moreover, it also can spread by sending copies of itself to the people in the address book of a user whose computer has already been infected by the virus.

Source:http://antivirus.about.com/b/2006/05/31/whats-a-trojan-horse-virus.htm


4 Cardinal Rules

"How safe is our data?", this must be the most common question that will pop up in all online users' mind. Based on the 6 types of online security threats that we have discussed above, here are 4 cardinal rules that we must follow in order to protect our data being safe from all these threats.

Rule 1 :
ALWAYS keep your anti-virus software up-to-date.

Rule 2 :
NEVER open an email attachment unless you know what it is, even if it is from someone that you know and trust.

Rule 3 :
NEVER give out personal information, credit information or password in chat rooms or in emails and do not provide credit card information online unless you can verify that the site is a secure site.

Rule 4 :
NEVER download executable files from untrusted sources. These files often contain damaging spyware or adware, and they can also contain other forms of malicious programs.

Source:http://www.massachusetts.edu/SecurityAwareness/12basicrules.html

The History and Evolution of E-commerce

History of E-commerce

E-commerce is the acronym that stands for Electronic Commerce in general. It is the practice of buying, selling and marketing of goods or services over an electronic medium. The meaning of electronic commerce has changed over the last 30 years. Originally, electronic commerce meant the facilitation of commercial transactions electronically, using technology such as Electronic Data Interchange (EDI) and Electronic Funds Transfer (EFT).

In the early days, e-commerce was conducted over private networks called Value Added Networks (or VANs) in the form of Electronic Data Interchange (EDI). EDI was basically limited to being used as a form to pass information between two or more companies. Two companies needed to subscribe to the same VAN, the format of messages that could be sent was heavily regulated, and the exchange of money took place outside of the VAN/EDI arena.

E-commerce was introduced in the late 1970s, allowing businesses to send commercial documents like purchase orders or invoices electronically. The growth and acceptance of credit cards, automated teller machines (ATM) and telephone banking in the 1980s were also forms of e-commerce. Besides that, Online shopping was invented in the UK in 1979 by Michael Aldrich and during the 1980s it was used extensively particularly by auto manufacturers such as Ford, Peugeot-Talbot, General Motors and Nissan. From the 1990s onwards, e-commerce would additionally include enterprise resource planning systems (ERP), data mining and data warehousing.

The evolution of e-commerce as following:



The Early Adopter of E-commerce
There is some example of the early adopter of e-commerce which has spent millions in trying to draw online shoppers through their virtual doors. The first early adopter of e-commerce technology that was founded in Malaysia is Pizza Hut. Meanwhile, the other examples of early adopter which founded internationally are Amazon and eBay. Both of them was founded in 1994 and launched in 1995.

What is Web 2.0?
Web 2.0 refers to a second generation of web development and design that facilitates communication, secure information sharing, interoperability, and collaboration on the World Wide Web. Web 2.0 concepts have led to the development and evolution of web-based communities, hosted services, and applications such as social-networking sites, video-sharing sites, wikis, blogs, and etc.

Web 2.0 websites typically include some of the following features/techniques:


References:

1. http://www.ecommerce-journal.com/articles/electronic_commerce_aka_e_commerce_history
2. http://en.wikipedia.org/wiki/E-commerce
3. http://www.redorbit.com/news/technology/534895/channeladvisor_receives_ebay_star_developer_award_awarded_ebay_early_adopter/index.html
4. http://en.wikipedia.org/wiki/Amazon.com
5. http://en.wikipedia.org/wiki/Ebay
6. http://blogs.zdnet.com/web2explorer/?p=5