Mobile payment is known as m-payment. M-payment is a real-time payment which is made with the use of a mobile device, such as cell phone, Smartphone, or personal digital assistant (PDA). It involves submitting an electronic remittance for an outstanding bill. Instead of paying with cash, check or credit cards, a consumer can use his or her mobile phone to pay for the goods and services which they purchased. Those goods and services are:-
a) Music, videos, ringtones, online game subscription, wallpapers and other digital goods.
b) Transportation fare such as bus, subway or train, parking meters and other services.
c) Books, magazines, tickets and other hard goods.

There are a total of four types of model payment which is available in Malaysia. Those models are:-
a) Premium SMS based transactional payments
b) Direct mobile billing
c) Mobile web payment (WAP)
d) Contactless Near Field Communication (NFC)

1) Premium SMS based transactional payment
Premium SMS based transactional payment enables customer to send a payment request via SMS text messages to a short code. A premium charge will be stated in the customer’s phone bill. Premium SMS transaction is normally used by customer who enjoys downloading music, ringtones, themes and so forth using their SMS. Customer only need to key in the specific code of the particular item to confirm that they want to purchase. The merchant involved is then informed of the payment success and can then release the paid for goods.

2) Direct mobile billing
Direct mobile billing enable customer to use mobile billing option during checkout at an ecommerce site. For example an online gaming site to make a payment. After the two factors which involve authentication of PIN and PASSWORD, the customer’s mobile account is automatically charged for the purchase. This is one of the methods where it does not require the use of credit card, debit card or even pre-registration online payment solution such as PayPal. The benefit is, it bypass the bank and credit card companies all together. There are other benefits that can be seen when using direct mobile billing, such as:-
i. Security – two factor authentication and risk management engine in order to prevent fraud.
ii. Convenience – no pre-registration and no new mobile software is required.
iii. Easy – it is just another option during a checkout process.
iv. Fast – most of the transaction are completed in less than 10 seconds.

3) Mobile web payments (WAP)
Mobile web payments enable user uses web pages displayed or additional application he/ she download and install on his/her phone to make a payment. It uses WAP as underlying technology which inherits all the advantages and disadvantages of it. The benefits of using WAP are:-
i. Follow-on sales – it can lead the consumer back to a store/ to other goods whichever they like. These pages have its own URL which can be a bookmark making it easy for the user to re-visit/share with their friends.
ii. High customer satisfaction – customer are satisfied using WAP due to the quick and predictable payments.
iii. Ease of use – it is a familiar set of online payment pages making user who uses it easier understand how does the WAP work.

4) Contactless Near Field Communication (NFC)
Contactless NFC is mainly used when making payment for the purchases made in the physical stores/transportation services. Most of the time, a transaction do not require authentication but there is still some transaction that need authentication like using PIN in order to complete a transaction. The payment made could be directly deduct from pre-paid account/charged to mobile or even bank account. Payments that use NFC faces vital challenges for wide and fast adoption, meanwhile, there are some phone manufacturers are enthusiastic due to lack of supporting infrastructure.

Potentials
As we know, mobile payments have been rapidly developing and are well used in Malaysia.
Nowadays, almost everyone is using mobile payments in their daily life. Users feel like and easy whenever they use mobile payment. They do not need to carry along credit cards, debit card of even cash. It is very convenient for the user because they just need to pay it through their mobile phones. For example, customer who uses this system does not need to queue up for the bill payment in the restaurant. The system is available for prepaid and postpaid service billings. Besides, it also covers most of the mobile operator in Malaysia.

Customers’ adoption strategies
a) Educate consumers about mobile payments, how to use and introduce its functions.
Mobile payments are widely used in Malaysia but there is still a group of people who does not familiar with this system. Therefore is important to teach this group of people how to use the systems. Having a campaign would be the best solution to it. Through this campaign, public are able to know the advantages of using the system such as making their life more convenient when making payment.

b) Enhance security and confidence to mobile users
Customer can now purchase goods through online without disclosing their credit card information. Through mobile payments, customer can purchase whatever goods or services they like without disclosing credit card information. It makes the user feel more secured and have confidence when using it.

c) Maintain customer’s loyalty
In order to maintain customer’s loyalty, company can reward customer who is using this systems. Reward can be in the form of gifts after customer purchase until a certain level or giving them extra credits in order for them to purchase more. Rewarding the customer is one of the ways to keep them using this system.

Related Link:
1. http://searchmobilecomputing.techtarget.com/sDefinition/0,,sid40_gci772807,00.html
2. http://en.wikipedia.org/wiki/Mobile_payment
3. http://www.wisegeek.com/what-is-m-payment.htm