The application of pre-paid cash card for consumers.

Basically, there are 3 types of cards, namely the pre-paid cash cards, credit cards and debit cards, which all of them provide almost the same functionality. The main difference between them is the method of paying.

For the pre-paid cash cards, you have to top up its balances before you use them, and it does not allow you to spend more than the amount you have pre-deposited into the account. Unlike credit cards, it allows consumers to spend money in the sense of credit terms, which means you are actually borrowing the money from the bank and paying it back later with the interest charges as well. On the other hand, debit cards deduct the amount spent from the consumers’ deposit account which is similar with the pre-paid cash cards, but the difference is that many debit cards offer an overdraft, which is credit, and you will be charged a small fee on that.

In short, pre-paid cash cards are cards that allow users to make a payment without the carrying of tangible cash, provided there’s an amount of balance in the pre-deposited account.

Following are examples of Pre-paid Cash Cards in Malaysia:

Touch 'n GO

AmBank NexG PrePaid MasterCard

The Application of Pre-paid Cash Cards

• Use for Daily Life

Consumers can use the pre-paid cash cards anywhere as long as the pre-paid cash card is accepted for use. For instance, the consumers can use the pre-paid cash cards for their daily life activities such as purchasing groceries at a supermarket, having dinner at the restaurant, paying for the transportation, toll, or parking fees, and so on.

• Online Transactions

We tend to get busy with our work or study sometimes. It is therefore very convenient for consumers to use the pre-paid cash cards to purchase or book something through online websites such as Amazon.com, Lelong.com, TGV.com, Redbox.com, and etc. Furthermore, they can also use the pre-paid cash card to make a payment of their utility bill, phone bill, student bill and other bills through the internet as well.

• Substitution of Travelers’ Cash

Usually, prepaid cash cards such as “AmBank NexG PrePaid MasterCard” are accepted worldwide. Therefore, rather than carrying a large amount of cash while travelling, it is safer for consumers to just hold on to a pre-paid cash card.

• Withdrawal of Cash from ATM

Not all pre-paid cash cards allow us to withdraw money from the ATM. But, most of the pre-paid cash cards allow their customers in doing so because for certain places, the pre-paid cash cards cannot be used for payment. Therefore, it is important for the pre-paid cash cards to have this function in order to allow their customers to withdraw cash out of the ATM in times of emergency.

In a nutshell, with pre-paid cash cards, customers will have a better control towards the spending rather than the credit and debit cards. In addition, it does not have a debt risk since the user cannot over spend the amount which the cards have. It is also much more secure carrying a pre-paid cash card rather than a huge amount of money. With the reasons mentioned above, that is why these pre-paid cash cards have became so popular today.

Mobile Payment Systems in Malaysia

With the intense use of technology gadgets nowadays, the mobile phone has become an essential device to people all around the world, from all ages. Today, the mobile phone’s functions have expanded tremendously apart from the basic function of phone calling and text messaging. In fact, it now enables internet surfing, instant messaging, music playing, e-mailling and even for the payment of goods and services which is known as mobile payment.

In specific, mobile payment (M-Payment) is a cashless and cardless payment method using a wireless mobile device, (e.g, handphones, smartphones and PDA), used for the payment of digital or physical goods and services, substituting cash, cheques and credit cards.

In Malaysia

TeleMoney, was Malaysia’s first mobile payment service made available using a GSM cellular phone. Also, we have Mobile Money which integrated their mobile payment method to their e-commerce software.

Recently, Visa launched its first mobile phone contactless payment system in Malaysia. Users can make their payment simply by waving their handset close to a reader. I’m sure some of you might have heard of Nokia 6212, which is among the handsets providing such service. With the collaboration of Visa, Nokia, Maybank, Touch n’ Go and Maxis, point-of-sales readers have been installed at more than 1800 merchant outlets in KL. This service provided by Maxis is known as Maxis Fast Tap.

With the growth of Wi-Fi and 3G, the mobile payment system has definitely a high potential in our country looking at the frequent use of mobile phones by the people. Mobile payment provides convenience, security and is much easier. In fact, many of us are starting to be aware of this and are already using the mobile payment service, for example, for top-ups and bill payments. This might also enhance the e-commerce industry in Malaysia, encouraging online sales to be made. However, there is much improvement to be made in Malaysia in order to further establish the use of mobile payment service.

Here is how you can make use of the mobile payment service:
• You can pay your utilities, assessment, internet, phone, insurance.
• You can pay your credit card bills, hire purchase to banks.
• You can reload your prepaid phone through Digi, Maxis, Celcom, i-talk, U mobile.
• You can also pay your merchant or charity.
• You can even pay remit money overseas to a wide range of countries.

For further details and instruction to the above actions, visit http://www.mobile-money.com/mmatmguide.html

Make your life easier with mobile payment, anytime, anywhere..!

Credit Card Debts: Causes and Preventions

Credit Card
Credit card allows its users to purchase goods and services on credit. The amount owed is then charged with interest by the card issuer which would normally be banks and financial institutions. Credit card actually brings great convenience to users as there is not a need to carry a huge amount of money everywhere. However, a lot of users tend to misuse the credit card by overspending, and thus engaging themselves in credit card debts, getting themselves into serious troubles.

Causes of Getting into Credit Card Debts
Spending Money You Do Not Have
In reality, all of us are using ‘future’ money everyday. For example, electricity and phone calls. We use the services first, and then only do we pay the bills at the end of the month. Things are worse when we are surrounded with attracting advertisements that tempts us easily, especially when it is as easy as just swiping our cards to get what we want! When the credit card amount stated in the statements cost more than what we can afford, we delay the payment and that is when the debt starts to increase.

Maintaining Expenses on a Reduced Income
Seeing that the country is facing economic crisis currently, this is especially common. Many are experiencing pay-cut or even worse, retrenchment. However, we are too used to our previous purchasing behaviour that we tend to forget about the lesser purchasing power we now have. Credit card debts occur when users do not reduce their expenses to match their new income level, and thus causing the figures on their credit card statements to double up as time goes by.

Saving Too Little or Not Saving At All
Having little or no funds in savings is a common mistake that leads to credit card debts. Savings up to three to six months is important to get prepared for emergencies like illness, job layoff, and divorce. When something urgent happens, you have your savings to back up and therefore needless to swipe your credit card, preventing yourselves from getting into credit card debt.

For further information, please refer to Bankrate’s Guide to Managing Your Debt: Top 10 Causes of Debt.

Prevention of Getting into Credit Card Debts
Setting up a Budget
The first and most important step is to set up a budget. It is essential to manage your income and expenses well in order to be aware of your financial status. With a reasonable budget in hand, you make sure your money is appropriately allocated in expenses and savings. Besides that, discipline yourself to keep track with the budget every month to make your budget successful. It is hard to set up a budget, but it is harder to stick to the budget.

Limit the Credit Card in Your Wallet
Firstly, think of ‘do you really need a card?’. Yes, credit card is necessary for emergencies and traveling. However, you only need one or two at the most for these situations. Cut off unnecessary cards so that you are not tempted to use them. It is much easier and safer to keep track of only one or two cards. Besides, spend some time to understand every credit card available in the market and then opt for the card which has the lowest interest rate. In this case, you reduce the possibility of getting yourself into credit card debts.

Pay on Time
Do not delay your payments. Making late payments allows the interests to accumulate which in turns get you involved in larger debts. Some people today apply an electronic funds transfer as a solution. It automatically pays your credit card purchases to card issuer at the end of the month by crediting your bank account. In such a way, you can avoid paying late and also avoid acquiring credit card debts.

For further information, please refer to How to Avoid Credit Card Debt.

Electronic Currency

With the tremendous development of the internet, many transactions have been made available online. These online transactions involve the exchange of goods and services with payment made through the internet, in an electronic form. When this takes place, there is then an electronic currency transaction. In other words, electronic currency refers to money which is exchanged only electronically, typically thru the use of computer networks like the internet.

For example, with online banking, banks are now able to offer services whereby a customer may transfer funds, purchase stocks, and a variety of other services without having to handle physical cash anymore.

As an implication to the above and with the emergence of e-commerce, the use of tangible cash is reducing from day to day as a result of the increasing usage of money in the electronic form.

In our country, the implementation of the “Touch N’ Go” card is among one of the success for the cashless environment that engages in electronic currency. “Touch N’ Go” is a contactless stored value smart card used to transfer electronic payments online for public transportation such as the LRT and KTM.

Advantages

Convenience and Privacy
Transfer of funds from an individual's personal account to a business's account is made without any actual paper transfer of money. This clearly provides convenience and a lower-hassle environment to many people and businesses alike.

Increased Efficiency of Transactions
Through the electronic currency, complicated calculations and large figures are computed with the help of computer. Also, there is no need to handle paper currency and thus, this reduces the possibility of you losing your money from carelessness or theft.

Lower Transaction Fees
Lower cost can be achieved because electronic currency eliminates the use of man power which could be costly. This result in lower transaction fees compared to fees charged to a walk-in customer.

New Business Opportunities
With the expansion of economic activities on the Internet, there is the emergence of new business opportunities. For instance, Paypal deals with electronic currency transactions by engaging in service of securing and transfer of funds.

Disadvantages

Fraud
Fraud over electronic currency has been one of the major concerns. With the lack of security and monitoring of the internet transactions, hacking into bank accounts and illegal retrieval of banking records has led to a widespread invasion of privacy and has promoted identity theft.

Failure of Technology
There is also a crucial issue regarding the technology involved in electronic currency such as power failures, loss of records and undependable software which could often cause a major setback in promoting the technology.

Risk of Global Exchanging Electronic Currency
There are also potential macroeconomic effects such as exchange rate instabilities. Besides, there is the possibility that digital cash would exceed the real cash available and this might lead to unfavorable consequences such as the shortage of money supplies.

Loss of Human Interactions
Transactions are made online, through the internet. Any necessary interaction needed might not be attained. In addition, some people still prefer to deal with humans rather than computers.