SMS banking transaction as an alternative for information, transfer and payment at merchant shops in Malaysia

This paper discusses Mobile Banking and Payment Systems using Short Message Services (SMS). The main goal of this system is to make banking services available to all mobile users in general with proper security in place and at minimum risk. This system provides banking services such as balance enquiries, fund transfer or bill payment and allows purchasing from stores. Any transaction is done through the SMS where the users of the system need to type the specific codes or commands for the transaction that they want to make. The commands require the user to type the PIN number (which is converted as hidden and encrypted text) and TAC (Transaction Authentication Code) for security purposes. Different transactions will have different commands that are sent to Malaysian Electronic Payment System (MEPS). These commands are then sent to respective banks through the encrypted channel. The components that are needed to enable this system are any kind of mobile phone that supports SMS system, encrypted communication channel and the banking system. This system makes transactions easier the users as neither cash nor credit cards are required for any transaction.