CIMB’s new Plug n Pay service targets new businesses

by **Cals** Tue 22 Oct 2013, 11:08

Business & Markets 2013

Written by Wei Lynn Tang & Levina Lim of theedgemalaysia.com

Tuesday, 22 October 2013 10:36

KUALA LUMPUR: Malaysia’s first chip-based mobile point-of-sale (mPOS) payment solution, as opposed to the current fixed point-of-sale solutions, is expected to revolutionise the electronic payment system via the use of smartphones and tablets.

Launched by CIMB Group Holdings Bhd chief executive Datuk Seri Nazir Razak yesterday, the new Plug n Pay service allows businesses of any size to conduct transactions while on the move.

By simply plugging the portable Plug n Pay card reader into their mobile devices, businesses can readily accept chip or signature-based credit and debit cards and safely conduct transactions using the Plug n Pay mobile application.

The Plug n Pay device, priced at RM250 each, accepts MasterCard and Visa cards. The mobile app is available on both the Apple App Store as well as Google Play Store.

For CIMB, the service will allow it to tap further into businesses that have yet to establish merchant banking relationships with the banking group. Its head of global sales, FX and transaction banking, Thomas Tan, said the bank expects an 80% take-up rate from new customers.

Malaysia’s second biggest banking group is targeting the fast-moving consumer goods (FMCG) industry where Plug n Pay can be used for businesses to obtain faster payment.

Nazir said there has been an increase in the number of debit and credit cards in circulation in Malaysia from 43 million at the beginning of 2012 to 47 million in 2013. Transactions made through debit and credit cards have also increased from RM95.1 billion with 342.2 million transactions as at end-2011 to RM102.7 billion with 360.8 million transactions as at end-2012.

“In Malaysia, there’s also widespread availability of affordable smartphones and tablets. Hence, the move away from a cash-only to a more cashless ecosystem is a natural step” said Nazir.

“The launch of Plug n Pay is also in tandem with our government’s effort to promote the adoption of electronic payments and to reduce dependency on cash transactions for greater economic efficiency.

“Bank Negara Malaysia hopes to boost the number of cashless transactions per capita from 44 to 200 and reduce the usage of cheques by more than half from 207 million to 100 million by 2020.”

The launch of Plug n Pay is seen as another of CIMB’s bold ventures into digital space, after its Go Mobile in Indonesia, CIMB OctoPay, Kwik Account and Kwik Money Transfer, which were all launched recently.

According to a source, Plug n Pay has received encouraging response although it was just launched yesterday.

CIMB also aims to reach out to insurance companies, delivery service providers, taxi operators and distributor-driven companies.

It also wants to tap into cross-selling opportunities with the launch of Plug n Pay.

Head of CIMB group cards and personal financing, Aaron Loo, said it is partnering with a number of strategic partners, such as telecommunication companies, to help sell the solution.

Thailand’s Kasikorn Bank launched a similar payment solution in early January. It is reported to have received 11,000 sign-ups since its launch.

This article first appeared in The Edge Financial Daily, on October 22, 2013.