List of Malaysia E-Commerce Payment Methods

During consultation with clients who aim to setup an online business in particular an online store, one of the most common questions is how do I collect payment and how do customers make payment?

The one and only method recognized by many clients because of its common use is via credit card. They don’t know how it works but they’ve heard from friends or relatives when shopping online, they would pay by just entering their credit card details. Alas online shopping in Malaysia is slightly difficult due to lack of exposure and insecurity of even the shop owner let alone the customer.

Malaysia e-commerce started very late and adding salt to the wound is our high numbers of credit card fraud. This affected Malaysia not only in the e-business but the mentality of the already conservative culture here. Consumers became so afraid that it contributed to one of the reasons not many aged around 40 years old aren’t using Internet banking services provided. But that’s a whole other story.

So let’s say you’re preparing to setup an online store in Malaysia. What do you need to know?

For starters, you need to what is a payment gateway. In layman, payment gateways encrypt sensitive information, such as credit card numbers, to ensure that information passes securely between the customer and the merchant.

Here’s a list of of common payment gateways courtesy of Wikipedia:

• Authorize.net
• Chase Paymentech
• Ctel Technologies
• eMatters
• Fastcharge.com
• iTransact
• LinkPoint
• Network Merchants
• Payment Express
• Paypal
• Plug ‘n Pay
• SafeMerchant Payment Gateway
• Skipjack Financial Services
• Soeasypay
• Shift4
• VaultLine
• Verepay Technologies
• VeriSign

The main difference between them are the chargeable fees. A payment gateway normally consists of these basic fees:

• Setup fee
• $ per sale
• $ Sale Amount
• Monthly fees

The biggest setback some of those gateways have is that they don’t support Malaysia banks. Meaning that the only way you can withdraw your money is sometimes through an American bank.

Not to be anti-Malaysia, here’s a list of local payment options for setting up an online store in Malaysia:

• Internet Banking
  • Maybank2u.com
  • PBEbank.com
  • RHB and etc.
• Auto Debit
  • PosPay
  • MEPS FPX
  • Mobile Money

I’ve yet to ask the banks how does the merchant account work in terms of transactions and tracking payments because last I heard, you need like a minimum sales of RM10,000 to apply for their service. So unless you’re selling gold or have a selling power that meets their mark, you can’t apply.

The auto debit scheme is not entirely new offline but it is online. While reading through their processes to make payment online (without visual guides), I’d have to say that FPX and PosPay seem the most tedious. Mobile Money on the other hand has a structured process for payment and it’s a matter of keying in the merchant ID, amount to be paid and your PIN for verification.

So what should you go for to jump on the Malaysia e-commerce bandwagon and setup your online business today?

I always introduce to clients providers like 2Checkout (2CO), WorldPay, and PayPal. Reason is because their reputation has been built solid so far with little to many complaints in rarity. For a local payment option, I’d recommend all since it’s less hassle.

However, the thing I dislike most about local payment options is the unnecessary process you have to go through in order to make a payment. In e-commerce today, it’s all about the speed of finding what you want, paying for it and getting what you want. Therefore if our local providers don’t improve on their payment process to facilitate the demand of speed and usability, merchants will continue to use non-local 3rd party processors.

Where did you first purchase locally online? And how was your first online shopping experience?

[tags]e-commerce, online shopping, internet banking, payment gateway[/tags]

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