June 03, 2008 15:22 PM

Mobile Phone Can Become Important Electronic Payment Channel, Says BNM

CYBERJAYA, June 3 (Bernama) -- There is a tremendous potential for mobile telecommunication networks to become an important electronic payment channel in the country considering that 88 percent of the Malaysian population are subscribing to mobile phone services.

Bank Negara Malaysia Governor Tan Sri Dr Zeti Akhtar Aziz said the high penetration rate affirmed mobile phone networks as an increasingly popular channel for Malaysians to perform a plethora of activities beyond voice communication, encompassing all forms of digital communication, commerce, banking and payments.

Indeed, payments via text messaging has the potential to grow in importance, Zeti said in her keynote address at the opening of "Mobile Digital Signature Symposium 2008" here Tuesday.

The half-day symposium was organised by the Malaysian Communications and Multimedia Commission (MCMC) with the theme, "Building an Interoperable Platform with a Common Digital Identity for Secure Mobile Transactions in Malaysia".

With 25 million mobile phone subscribers in Malaysia, Zeti said there were immense opportunities to leverage on mobile phones to accelerate the migration to electronic payments, to widen the reach and appeal of electronic payment services, and to deliver innovative mobile payment products that offer speed and convenience at minimal cost for the public.

There are also opportunities to enable the provision of efficient and cost-effective method of delivering financial services even in the remote areas, she said.

With a population of 27 million, the banking system in Malaysia has 55 million deposit accounts indicating that a high percentage of the population have deposit accounts with the banking system.

The high percentage of mobile phone subscriber and the high rate of participation of the population in the banking system are important pre-condition for the significant use of the mobile phone as an ideal platform for personal payments.

To date, there are only 460,000 subscribers for mobile banking and payment services. This represents only 1.8 percent of the 25 million mobile phone subscribers in the country.

Zeti pointed out that industry has to respond rapidly to address the need for interoperability and collaborate in areas such as developing a common infrastructure, common payment messaging format as well as common security and authentication standards, to promote the significant use of the mobile phone for financial services.

A shared integrated network with common security standard and common messaging standards would make it easier, more cost-effective and more convenient for consumers, merchants and service providers to execute and receive payments, thereby increasing the attractiveness of the mobile network as a payment channel, she added.

-- BERNAMA

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