One of the interesting things about presenting PocketSmith to Malaysians is the different reaction that we get from Kiwis – key reason for this is the relevance of our product to the local market. New Zealand is a leader in cashless payments, and we take EFTPOS for granted where the majority of the world revolves around a cash economy.
Most small business transactions here are conducted in cash, and while debit card systems exist, uptake has been low and so there isn’t a ubiquitous payments system like we have in New Zealand. While we’ve been fortunate in that NZ is a fertile testing ground for an application like PocketSmith and that its population understands the nature of matching transactions to budgets, we’re also aware that this unique and ideal home ecosystem means that we have to adapt to suit other markets. Perhaps we’re paving the way for things to come, but in terms of what our application has to offer it’s still a few years ahead of what’s available.
So the reaction to PocketSmith in Malaysia is somewhat mixed. We’re used to presenting the app from tip-to-toe in NZ and seeing eyes brighten, but to individuals here it appears that the cashflow forecasting calendar hits the spot, while the actuals and compares features don’t quite register.
There are a number of other reasons for this. Malaysia is still an emerging market, and the banking sector – while fast maturing – has quite a ways to come yet. Many local banks don’t provide users with downloadable copies of their transactions; if they do, the number of transactions is limited to say, the most recent 30 days. There also doesn’t seem to be a standard for internet-based transactions, I’ve heard of a situation where an individual has had to transfer money from one bank to another just to perform a direct deposit because the interface at the first bank doesn’t support the correct number of digits.
While this sounds pretty lo-fi from the outset, things aren’t as straightforward here however. In some ways the nature of an emerging market indicates some ways for an economy to go towards being a developed nation; in others the rapid growth means a proliferation and subsequent adoption of a range of new technologies amongst the populace.
I can’t use my credit cards at petrol station pumps for example, as all credit cards here are now equipped with a smartcard chip – a global standard for security that helped combat the once high levels of credit card fraud here in Malaysia. Our simple magnetic strip cards are easy to clone, and all it takes is one swipe through a cloning machine, with a photograph of the front and back – and the perpetrator has everything but the pin: number, data, CVC2, signature. So yes, I get funny looks when I present what looks like an Amex from four years ago.
Also in 2004, Visa debuted Visa Wave here in Malaysia, which allows a user to do exactly that – wave their credit card past a reader without handing it over, with the transaction conducted through RF. So here’s a card that contains additional technology that allows it to work with and without contact.
One payments system that’s been around for the last ten years now is Touch’n Go, a non-contact proximity card that’s pre-loaded with a cash value. It’s in use at all expressway tollbooths in Malaysia (of which there are many), as well as at numerous carpark entry points. The convenience is obvious especially in the case of the latter, saving the user queues at payment machines or carpark exit booths, as well as the need to hang on to a carpark ticket.
Another payment mechanism built to facilitate the flow of traffic through tollbooths is SmartTAG, which was also introduced nearly ten years ago. It’s a device that sits on the car’s dashboard, and works within 15 meters of the point of payment, allowing a user to literally cruise through a tollbooth at around 50km/h.
Technologies such as these are opportunities for us to diversify PocketSmith’s points of data collection – however we’ll have to think quite carefully around a strategy for implementation and its relevance to the local market. We could push, or alternatively wait until the time is right. To this end, we’re also talking to local venture capitalists to see what opportunities they might perceive in relation to our core technology.
And through all this, technology remains but one aspect of what we’d have to learn to adapt to if we were to export here. The other aspect revolves around understanding cultural norms and attitudes around money; and this one isn’t as obvious as simply looking at the toys available. I hope to write a bit more about this as I gain better insights into this.
On the topic of toys and high technology however, I’ll end the post by telling you about a device I’ve learned of here that’s both intriguing and impressive.
I’ve been warned not to leave my laptop in the car. And it’s not the usual, “Don’t leave your valuables in an obvious location,” – it’s plain and simple: “Don’t leave your laptop in the car.”
The reason for this is that laptop thieves here are in possession of a device which can detect laptops in vehicles and homes. Remotely. When they’re switched off. I’m pretty late to the game as the article on Engadget is dated 2006 – regardless, nobody still knows what this device looks like, or how it works. I have met people who’ve had their laptops boosted from their cars however: my cousin for example lost four out of his boot (trunk) when the car was parked on the street in a public place. The thieves however were conscientious enough to place a passport from one of the laptop bags on the dashboard before they left.
So here we are. Emerging markets, high technology and…. entrepreneurism and innovation, to an extent. I’ll need to write about the latter in my next post 
Tags: banking, emerging market, Malaysia, Technology, transactions
