Payments Gateways Evolve With The Times


A robust fraud prevention system in place is key to a good payment gateway.

Continuing on our e-commerce focus this week, Business Circle looks at what online merchants must do to ensure customers have peace of mind and confidence when transacting on their site. 

Not surprising that the top of mind concern for customers when e-commerce is mentioned always revolves around security issues. While most e-commerce merchants may think having a payment gateway is enough, ipay88 Sdn Bhd executive director Lim Kok Hing stresses that

Having a robust fraud prevention system in place is key to a good payment gateway, says Lim who has been in the payment gateway niche since 2006.

“In addition, it is important to conduct fraud filtering to ensure a stolen credit card isn’t being used to purchase products. For example, if transaction activity includes purchases worth RM50,000, we would investigate, especially if most items cost a few hundred ringgit,” he adds.

The right payment gateway service should also be efficient and be able to select or reject different payment options based on a list of criteria. Says Lim: “So for example, a merchant might not want to accept different payment options such as credit cards from Australia for example, and he has the ability to filter these transactions.”

Lim foresees that in the next three years, a lot of online purchases will be made via smart phones and tablets

In addition, online payment users may ask if there is a system to ensure the credit cardholder is the authentic owner of the card. “If you buy over iPay you would be prompted to fill in the password and it will be sent to your mobile phone. Similarly, for the credit card, you need to key in a password for authentication. If it is a non-3D-secured gateway, a person could make a purchase with a stolen credit card,” he cautions.

He adds that the landscape for payment gateway has evolved, with more small businesses and brick-and-mortar companies wanting to go online as that is where more customers are moving to. And while the early trend was for transactions online to be conducted via a PC or notebook, that has changed today. The popularity of smart phones and tablets with different operating standards and smaller screen sizes is the new reality for e-commerce and that is the challenge for merchants today.

“In the next three years, we foresee that a lot of purchases will be made via these smart phones and tablets and we need to cater to these changing circumstances,” says Lim whose company now operates regionally having expanded out from Malaysia. It is also an MSC Malaysia status company.

“We operate in Malaysia, Indonesia and the Philippines. Among the challenges is to gain the confidence of the consumer that ours is a safe gateway and secondly, to get the regulators and financial institutions to accept you as a partner. This can take a year or longer to achieve. Once you have built up a critical mass, then the business starts to grow rapidly.”

On the ground, iPay88 organises advertising and promotion (A&P) activities to educate and acquire merchants to use its payment gateway. These activities include campaigns via the internet, roadshows and other events. “We recently had an exhibition at KLCC and a regular feature is that our sales people meet clients to explain in detail how our system works.”

Lim notes that Malaysia’s ever improving broadband infrastructure is resulting in an ever rising number of brick and mortar merchants going online and even individuals with unique hand made products to test the global market online.


The views expressed here are the personal opinion of the columnist.

Photo credit: Flickr user BounceEnergy

Leave a Comment