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Making wide range of payments without cash, cheques, credit cards or doing online payments are the PAST! There is the new system that only requires your mobile phone! Now, you can pay at the office, in your car, at home or just anywhere, by not even have to be at the point of purchase to make payments! Seems interesting?! Read on…

Mobile Money and Mobile Wallet are examples of Mobile Service Provider.

This brand new system is going to take the lead in the near future, known as “Mobile Money”. It is an innovative closed loop payment system where consumers will be informed via SMS each time he or she makes a payment. In short, it simply means that it brings payments to you instead of you having to go to make payments.

“Mobile Money” is convenient yet secure and rewarding. It is designed with 9 levels of protection to enhance security and to minimize fraud. Each transaction will also be rewarded with instant cash rebate and the “e-cash” accumulated can be used to make purchases at any “Mobile Money” retail outlets. At the same time, participating outlets are also running their own loyalty programmes and offering bonus points to their “Mobile Money” customers, further enhancing the benefits of paying via this mobile payment system.

Potential of Mobile Payment System

There are a great room of potential for this payment system to grow more rapidly. With the mobile payment system, consumers no longer need to carry cash, credit cards, or clicking through ample of different websites or going to the outlets looking for parking and queuing up to pay bills. Thus, it is hassle free! What you need to do is to get yourself registered to the “Mobile Money” service provider and top up with “M-Money” instantly and you can start paying your bills or doing remote shopping by just typing a SMS code, and your transaction is done! Anywhere, anytime, anyone!

These 2 diagrams show how Mobile Payment System work. Simple?!

Next, consumers are reluctant to change their payment methods due to security problem. Everyone is worried about the violation of privacy where all our personal or financial information and tools fell into the wrong hands. However, the mobile payment system is designed with 9 levels of protection to enhance security and minimize fraud. Thus, it is much safer, you need not worry even if you lost your mobile phone...

Consumer Adoption Strategies

As long as the mobile payment system perform as well as it designed to, Malaysians will adopt this new convenient payment method. Moreover, in order to make this payment system being adopted quickly, mobile payment service providers should work hand-in-hand to do aggregate advertising and educate all Malaysians with the benefits of “M-Money”.

References:

http://www.mobile-money.com/2iamuser.html

http://www.mobilewallet2u.com/lang/en/services_main.html

http://www.hlb.com.my/news/2005/corn143.jsp?flag=092005

Electronic currency (also known as e-money, electronic money, electronic cash, digital money, digital cash or digital currency) refers to money or scrip which is exchanged only electronically. This involves use of computer networks, the Internet and digital stored value systems. Moreover, it is a collective term for financial cryptography and technologies enabling it.

There are two examples of electronic currency - Electronic Funds Transfer (EFT) and direct deposit. EFT refers to the computer-based systems used to perform financial transactions electronically. However, direct deposit refers to the electronic transfer of a payment directly from the account of the payer to that of the party being paid.

One rare success has been Hong Kong's Octopus card system which started as a transit payment system and has growth into a widely used electronic cash system. Singapore also has an electronic currency implementation for its public transportation system (commuter trains, bus, etc) which is very similar to Hong Kong's Octopus card and based on the same type of card (FeliCa). A very successful implementation is in the Netherland, known as Chipknip.



Future evolution
The main focuses of digital cash development are being able to use it through a wider range of hardware such as secured credit cards and linked bank accounts that would generally be used over an internet means, for exchange with a secure micropayment system such as in large corporations (PayPal).Theoretical developments in the area of decentralized money are underway that may rival traditional, centralized money. Systems of accounting such as Altruistic Economics are emerging that are entirely electronic, and can be more efficient and more realistic because they do not assume a zero-sum transaction model.

Pros
Electronic currency can provide many benefits such as convenience and privacy, increased efficiency of transactions, lower transaction fees, new business opportunities with the expansion of economic activities on the Internet.

Cons
The transfer of electronic currency raises disadvantages such as how to levy taxes or the possible ease of money laundering. There are also potential macroeconomic effects such as exchange rate instabilities and shortage of money supplies (total amount of digital cash versus total amount of real cash available, basically the possibility that digital cash could exceed the real cash available). These issues may only be addressable by some type of cyberspace regulations or laws that regulate the transactions and watch for signs of trouble.

References:
http://www.answers.com/topic/electronic-money
http://www.answers.com/topic/electronic-funds-transfer
http://www.answers.com/topic/direct-deposit

Nowadays, people can limit their spending with their prepaid cash card that load funds onto the card and use the money. A prepaid cash card allows consumers to purchase something even when they don’t have the cash to pay for it. It benefits consumers in their everyday life. Basically, a prepaid card looks like a credit or debit card, and gives users the ability to purchase products and services with a card but with a crucial difference - you can only spend the balance that has been preloaded onto the card. This means there is no risk of running into debt as it has no credit or overdraft facility.

The application of pre-paid cash card for consumers:

There are several types of pre-paid cash card:

Pre-paid Vista Cash Card

It is issued by Four Oaks Bank & Trust Company that given the opportunity for consumers with poor credit record and young children by not spending more than the balance on the card. Visa permits travelers access to money at automated teller machines in 65 countries and book the train tickets by offering prepaid cash card such as Metro Card in New York City.

Tough ‘n Go (TnG)
(TnG)smart card is used by Malaysian for electronic payment system to toll expressway and highway. It is expanding its business to retail purchase by starting with fast food industry that enables consumers to buy dough nut, burger or fast-food from 21 outlets such as Burger King, 7-Eleven, Dunkin’ Donut.

References:

http://www.maybank2u.com.my/consumer/online_cards/visa_debit/benefits.shtml

Credit cards can be a great tool but all too often we find we've spent more than we can manage to pay back. This is especially true when we have multiple credit cards and lose track of how much we owe on each of them. Nowadays, credit card debts are major cause of bankruptcies each year. It is because many people do not pay money that they have spent to the company. Therefore, debt accumulates and increases via interest and penalties.

Prevention