The application of prepaid cash card for consumer

Prepaid cash card, a preloaded card for people to spend on the products and services with the money they deposit in the account . Unlike the credit card, using prepaid cash card you no need worry about overload your card and faced any debts. Once your spending come to the limited amount, you cannot spend anymore until the money deposit again to the account. Besides, it is also a perfect way for the users to control their own spending and budget before making any payment.

Here are the examples that are using for explain how is the prepaid credit card has been applicated in our daily life:



Touch' n Go or (TNG), smart card is used by Malaysian Expresses ang Highways operators as the sole electronic payment system(EPS). Currently, The Touch 'n Go card is no longer only for the toll fare, but also for public transort, parking services and certain retail merchant outlets. By using the touch' n go, the speed of payment can be enhanced and as convenient as we no longer requires to prepare small change. For example, the users no need to waste the time to queue up at the cash lane for the toll fare. With the touch' n go, now u can just waiver at the sensor and pay the toll fees, it really save a lot of the users' time and improve the problem of traffic jam.

Octopus card, the first contactless smart card system in the world. It lauched in September,1997 and used to transfer electronic payments in online or offline system in Hong Kong. When the octopus card first introduced in Hong Kong for the fare payment in MRT, but now the card is wisely used in multiple other services. Similarly with the Touch' n Go smart card, octopus card is wisely used payment system for virtually all public transport in Hong Kong and also used for the parking services,certain retail outlets like fast food restaurant and supermarket. It just became part of the Hong Kong people's life and simply waved over a sensor and the correct amount is either deducted or added to your balance immediately.

For more information, you can visit to the following websites:
http://www.moneysupermarket.com/c/prepaid-cards/guide/
http://www.hong-kong-travel.org/Octopus.asp
http://www.dmsretail.com/etailing.htm
https://loyalty.touchngo.com.my/

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mobile payment system

A mobile payment or m-payment may be defined, for our purposes, as any payment where a mobile device is used to initiate, authorize and confirm an exchange of financial value in return for goods and services. Mobile devices may include mobile phones, PDAs, wireless tablets and any other device that connect to mobile telecommunication network and make it possible for payments to be made. The realization of mobile payments will make possible new and unforeseen ways of convenience and commerce. It has also been popular in Malaysia.
Mobile Money is a PIN-based Mobile Payment Solution to address the limitations and bottlenecks created by cash, cheques and credit cards. It only allows registered users to pay for goods and services at anytime, anywhere using only a mobile phone coupled with a 6-digit security PIN via SMS. This gives the freedom to shoppers to buy products online and pay the merchant using his/her mobile phone without being physically present at the store.

Mobile Money International Sdn Bhd is one of the biggest mobile payment service providers in Malaysia. Mr. Lee Eng Sia sees the opportunity and potential of mobile money and thus initiated the idea of mobile payment system introduced in Malaysia. Its objective is to provide Merchants and consumers with a convenient and secure Mobile Payment and Mobile Commerce platform.

The introduction of mobile money has benefited both participating merchants and consumers. The merchant can now sell to people across town, across the country and take payment around the clock, which is not possible with current payment systems. Online selling (e-commerce) becomes a practical means for merchants since customers will only need to enter their mobile phone during checkout from merchant e-commerce website. With Mobile Money, merchants do not have to be concern of cash /cheque/credit card handling problems or fraud. The Mobile Money Payment System conforms to the stringent requirements set by Bank Negara Malaysia and the participating banks. Furthermore, consumers don't need to have a merchant account to apply for Mobile Money, consumers’ existing bank account will suffice. It will easily save them RM50,000 which they need to deposit in their merchant account with banks. On the other hand, consumers who use mobile money service are able to enjoy the convenience to pay anyone, including to any bank accounts from anywhere, at anytime. You can pay various bills and your loan repayments at home. With its advantage, consumer can start to buy and save from participating mobile commerce platform.

In addition, it can function like a credit card if a consumer applies for a “Pay by Mobile Phone” credit card account. Therefore, the consumer will be billed by the bank by month’s end. Alternatively, it can function as a Debit Card if the consumer applies for savings or current account. The amounted consumed will be deducted directly from the account upon successful transaction.


How it works
1. Customer That Purchase Online from an E-commerce Website
2. Pay by Mobile Phone Number(Applies to customer purchase from merchant's brick-and-mortar store or Remote Payment)


1. Customers choose to pay via Mobile Money for the goods and services from participating merchants.
Customer gives merchant his/her mobile number via phone, fax, email etc.


2. Merchant can bill the customer via IVR, Mobile Money website or SMS. When merchant requests for payment with customer's mobile number, Mobile Money sends an SMS with a Bill Reference Number to customer requesting customer to to reply with their 6-Digit Security PIN to approve the payment.


3. Customer authorizes payment by replying the SMS with the Bill Reference Number and customer's 6-digit SECURITY PIN.Mobile Money authenticates customer's SECURITY PIN and requests for bank approval on transaction.
(In this illustration, 001 is the Bill Reference Number while 123456 is the security PIN. In simpler terms, 001 means it is the 1'st SMS request for payment, 002 means the 2'nd, 003 means the 3'rd and the number increases. )


4. upon receipt of bank's confirmation to debit customer's mobile credit account or mobile Debit account, Mobile Money will send a payment notification with details to merchant as well as customer.


5. Merchant can deliver the goods / services.

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Electronic currency

Money was originally a physical substance like gold and silver. It could even be alive - cattle were one of the oldest forms of money. Today, although much of the money used by individuals in their everyday transactions is still in the form of notes and coins, its quantity is small in comparison with the intangible money that exists only as entries in bank records. Perhaps coins and banknotes will become as obsolete as cowrie shells because the use of electronic currency.


Electronic currency also knows as electronic money, electronic cash, or digital currency. Electronic currency refers to money or scrip which is exchanged only electronically. Normally, it involves use of computer networks, the internet and digital stored value systems. E-currency provides the Internet user with a safer and more convenient way in dealing with online transaction as they can make the payment by just a simply click on the confirm button and the deal is then completed. It minimizes the risk of using the credit card where the users’ personal financial information might be explored or being stolen.

Examples of e-micro payment system:

(a)Peppercoin is a cryptographic system for processing micropayments. Micropayments are means for transferring very small amounts of money, in situations where collecting such small amounts if money with usual payments systems is impractical or very expensive, in term of the amount of money being collected. Peppercoin Inc. was a company that offers services based on the perception method. The “Peppercoin” method uses universal aggregation, which we sometimes times also call cryptographic selection. The Peppercoin system ensures that consumers are never billed for more than he has spent. Peppercoin’s micropayment system is the first that allows online merchants, banks and other companies build market adoption quickly through a consumer-friendly, pay-as-you-go approach that eliminate prepayments. Peppercoin integrates easily with existing business models and systems to accelerate revenues and increase profits while dramatically lowering transaction and customer services cost. Peppercoin collect 5-9% of transaction cost from the merchant. In 2007, Peppercoin was bought by Chockstone for an undisclosed amount.

(b)Payloadz is a service to sell intangible products such as softwares, e-books, digital art, manuals, articles and files. It is an automated delivery service. This means that seller can go on vacation without worrying about sending download links to the consumers every time a payment is made. These files can be either download via hyperlink or sent via e-mail based upon seller's product. Payloadz also has an easy intergration with paypal. Payloadz services can be used depending upon seller's sales and products file size.

(c)PayPal is an e-commerce business allowing payments and money transfers to be made through the Internet. PayPal serves as an electronic alternative to traditional paper methods such as checks and money orders.A PayPal account can be funded with an electronic debit from a bank account or by a credit card.PayPal performs payment processing for online vendors, auction sites, and other corporate users, for which it charges a fee. It sometimes also charges a transaction fee for receiving money (a percentage of the amount sent plus an additional fixed amount). The fees charged depend on the currency used, the payment option used, the country of the sender, the country of the recipient, the amount sent and the recipient's account type.

Referred links:

1.http://http//en.wikipedia.org/wiki/Electronic_currency

2.http://en.wikipedia.org/wiki/Peppercoin

3.https://www.payloadz.com/
4.http://en.wikipedia.org/wiki/PayPal

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Credit card debts: Cause and Prevention

Nowadays, credit card have become part of our life. In the point of view of most people, these cards are symbols of wealth. However, many of them do not actually know how to use their cards wisely. According to the Credit Counselling and Debt Management Agency (AKPK), credit card debt in Malaysia has not yet reached a critical level. Based on Bank Negara Malaysia's statistics, the debt stood at RM24.4 billion as at end of March 2009. However, RM24.4 billion is not a small money. So the knowledge of the cause and prevention of credit card debts are important for us to eliminate the debts.

Causes of Credit Card debts

The main cause is that people buy with one credit card till the limit is over after that they switch to another credit card and so on. While doing so, they never think of their income or bank resources and even forget that they have to pay this back. Finally, when they see the card statement, they find themselves in a huge financial mess.

Besides that, the interest and penalties payment are the others causes. Debt accumulates and increases via interest and penalties when the consumer does not pay the company for the money he or she has spent. The results of not paying this debt on time are that the company will charge a late payment penalty and report the late payment to credit rating agencies. The late payment penalty itself increases the amount of debt the consumer has. When consumer has been late on a payment, it is possible that other creditors, even creditors the consumer was not late in paying, may increase the interest rates the consumer is paying.

Here are others causes of credit card debts:

• You can easily get a credit card from any company. The company themselve try hard to issue a credit card to you with multiple options and schemes.
• If you have a card you need not to carry cash so that there is no chance of loosing money.
• You can do unlimited shopping with multiple cards even if you do not have a money.

Prevetion of Credit Card Debts

• keep your credit cards to a limited number. Most of the people who have mounting credit card debts are having this problem because they have too many cards in the first place. If you want to have a card that you can use everywhere, try just having a Visa, MasterCard which are all used everywhere.
• Establish a budget and then follow that budget exactly. In other words, don't be tempted to charge that plasma TV to your credit card on a whim when you haven't budgeted for it this month.
• Avoid making any purchases with your credit during peak buying seasons such as Christmas. Credit card companies charge you more interest during these peak seasons because they know that everyone is buying more items with their credit cards. Most of these companies will not make a point to tell you this, but they make a mint off of us at these times.
• Be aware that balance transfer credit cards' teaser rates won't last forever. Six months is common now. The "normal" rate will return sooner than you think, so use that interest-free period to aggressively pay down balances.
• Finally if we find that we simply cannot control our credit card spending then we may have to opt for the most difficult step of all, putting our credit cards on ice for a while. That will mean a change in lifestyle and spending habits but if the hole from credit card debts is getting too deep then we just might have to stop digging.

References:

http://www.bernama.com.my/bernama/v5/newsbusiness.php?id=416849

http://en.wikipedia.org/wiki/Credit_card_debt

http://www.creditcards.com/credit-card-news/5-simple-credit-card-debt-rules-1267.php

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