MPU member banks to boost cashless payments

The infrastructure to facilitate card payment transactions is essential if Myanmar’s economy is to evolve beyond a system dominated by cash, said banking officials at the Myanmar Banking and Finance Conference in Yangon on 28 July.
U Zaw Lin Htut, chief executive officer of Myanmar Payment Union (MPU) said adequate rules and regulations for electronic cashless payments are yet to come, adding that there is also a need to resolve power shortages and to upgrade technology.
The volume of automated teller machine (ATM) transactions remains much higher than Point of Sale (POS) transactions since they were first introduced to the country in 2012.
The growth rate of POS terminals is slower than ATMs, due to a number of challenges, particularly the high cost for merchants, and information technology (IT) communication systems that are only available for fixed lines, said U Zaw Lin Htut.
“But hopefully POS growth will rise fast because of the 3G network services available here, and service providers such as Telenor, Ooredoo and KDDI coming to the country,” he said.
In 2013, Norway’s Telenor and Qatar’s Ooredoo were awarded licences to operate in Myanmar. Last year, Japan’s KDDI and Sumitomo Corporation formed a joint venture with the incumbent Myanma Posts and Telecommunications (MPT).
About 5pc of Myanmar’s population has access to banking services, said U Zaw Lin Htut. “I think cash is still king in the country and 99.9pc of payments are made in cash, so public education is the first priority to change that habit,” he said.
One of the ways to change the habit is to introduce potential customers to formal banking channels, he said, adding that the regulator should provide balanced guidelines. The Central Bank of Myanmar, regulators and service providers all have important roles to play in filling the infrastructure gap, he said.
U Zayar Aung, deputy general manager of banking IT operations at CB Bank, said that tourism has forced merchants to provide POS machines, helping to improve card payment options in Myanmar. “We have achieved a lot within three years to make non-cash payments available,” he said.
Potential growth areas for POS are petrol stations, airlines and the tourism industry, said U Zayar Aung. The purposes of establishing MPU in 2011 was to establish a card payment society. The final objective of the union is to improve the existing payment system, he said.
The MPU’s 21 member banks began offering debit cards in 2012. Credit cards were introduced early this year. MPU sources said there are a total of around 1.1 million card users, which is very low compared with Myanmar’s population of 51.4 million.
MPU launched E-commerce online payments in February this year.