Thanks to greater use of mobile and advancement in telecommunications during the last five years in Myanmar, people now have new sets of options for how to conduct their finances. The mobile payment units such as Wave Money, Ongo, True money, banked or telecom company-owned mobile wallets such as KBZPay, M-Pitesan, MPT Money, and other foreign payment services such as Visa, Paypal and UnionPay are disrupting Myanmar’s cash rich economy into a digitally transacted financial sector. In parallel to developing digital financial service infrastructure, 2019 reckons that a number of mobile fintechs are taking positioning as comfortable, affordable, agile and a secure payment platforms in people’s daily lives.
Despite the relatively low penetration of financial inclusion in Myanmar with 6% of adult using more than one financial product as noted in ONOW Myanmar report, nature of preference over physical cash and decades old norms on cash transactions are all distorted by digital services. The announcement made by YBS in late 2019 that the current cash bus fares will be replaced with card system shows that the government, businesses and consumers are following cashless society to become real in the years to come.
Every little piece makes a pie. Not every good change happens overnight. Buying, selling, bill top-up and public transportation count to an individual’s daily life where products and services we are consuming introduce changes and make us feel at home in those changes. It is the same for mobile fintechs. They serve people with technology led financial services on phones, which is really affordable and easily reached out by any class of population without consideration of bank accounts. That’s the huge impact brought by fintechs and digital financial service providers.
The usage of mobile money grows phenomenally in Myanmar. For people who send and receive money, usage of mobile money has increased from 0.8% in 2016 to 80% in 2019 as shown by the recent survey conducted by Kantar TNS.
“More than 11 million people are sending and receiving money, paying utility bills digitally through Wave Money platform. In 2019, with more than 45,000 agents throughout Myanmar, Wave Money has a foothold in 89 percent of the country, covering 85 percent of rural space,” says in its half year report.
Fintech startups such as Wave Money are becoming important connection points in the financial services ecosystem. They are partnering with Banks to support an ever-increasing number of electronic payments.
Yoma Bank and Telenor are stakeholders to Wave Money. Its partnerships with growing businesses such as Metro Wholesale, Oway Online Travel and Ananda are contributing to opportunities for customers to be transacted digitally more and more.
Some fintechs spotted an opportunity in the international remittance market. True money, the only fintech company doing international remittance from Thailand to Myanmar in addition to consumer facilities through offline over-the-counter services, also sees geographical business growth in 2019. “Availability of affordable and quality services through quality agents is the fundamental value to our customers, no matter if there are bank facilities or not. We are available in more than 270 townships having around 15,000 shops with improved income of agents in 2019,” Ambrish Dixit, MD of True money told to Myanmar Insider.
Fintechs can also improve the efficiency of microfinance projects, not just limited to mobile remittance network. Ongo is well known for its digital payment services in Business-to-Business market, reaching up to 26,000 corporate clients and 130 corporate clients. Backed by Myanmar Oriental Bank, there are some microfinance companies that Ongo works with this year to leverage the loan repayment transactions with technology. It formed a partnership with microfinance lender Advans MFI Myanmar, which offers village banking to clients in rural areas as well as small group lending products and individual loans in urban areas to facilitate loan repayment via mobile app or QR card. It also signed with BRAC Myanmar Microfinance Company. Easy Microfinance is one of Ongo’s expansions into microfinance market in 2019.
On the other hand, traditional banks welcome the emergence of digital financial services as a complementary to inclusive growth of the financial industry. According to Myanmar Times, CB Bank has set up its Innovation Lab on the API-Exchange (Apix), the world’s first cross-border open-architecture platform to enable financial institutions and fintech firms to discover one another under a standardised and cost-effective framework among ASEAN countries. CB Bank launched M-Pitesan in 2017 in collaboration with mobile operator Ooredoo.
When it comes to mobile wallets owned by banks, a user friendly wallet, KBZPay, is paving a way out of simplicity by taking advantage of their old and strong establishment of KBZ Bank. General Manager of KBZPay, Soe Ko Ko is bullish about the impact of booming digital payment market on economic growth saying “If the usage increased two to twelve in upcoming years, if twelve can be made to twenty, by that time cash flow will become faster. And the trade flow will come up with it. So I’m confident that the economy can’t remain without any improved growth rate. But we know we cannot do it alone.” Developed in partnership with Chinese tech giant Huawei, the app launched in late 2018, has grasped more than 2 million customers by June, the Myanmar Times reported, which is expected to double that by the end of this year.
MPT Money is a mobile wallet product of MPT, the most recent recipient of a Mobile Financial Services License (MFS) by the Central Bank. The Central Bank introduced the Mobile Financial Services Regulations in 2016 and allowed licenses. There are two licenses options that an enterprise can go, if planning to do a fintech related business in Myanmar. An applicant must acquire MFS to transact cash-in, cash-out, domestic remittance, bill top-ups and bill payments with a minimum capital of $2.5 million and an application fee of 0.1% of capital. Depending on its nature of business model, there are some fintechs like True money and Ongo which choose to partner with Banks and operate under the Mobile Banking License. Some start-ups wholly providing microloans digitally are positioned as fintechs for instance Mother Finance.
According to global experts, insuretechs are expected to disrupt the traditional insurance industry. At the micro level, the biggest players in the telecom sector, strongly established local banks and their subsidiaries in the insurance industry are tapping into new collaborations and forming a financial inclusion image. Telenor, a Norway based telecom company in Myanmar, launched a new micro insurance product called “SateChaLife” partnering with CB Insurance in September. “The high penetration of mobile makes it important and game changing platform to enable greater insurance access. With Telenor’s reach, we are making it easy, simple and affordable for Myanmar people,” says CEO of CB Insurance in press statement.
Fintech is a new arena for businesses and regulators in other countries regardless of developed or developing economies. For developing markets like Myanmar, private partnerships alone are not enough. On the other hand, officials from MOPF has embarked on a plan toward financial inclusion by collaborating with UK and Australian governments and announced a fintech programme titled “the Fintech Challenge Myanmar” in May. The programme will identify fintech solutions that can improve the quality and quantity of financial services to the underserved and unbanked. There are trust issues the current mobile fintechs and digital financial service providers have to overcome. In November, Wave Money led and hosted a talk show by inviting global expert who oriented and discussed about is Digital financial service Interoperability, which is a new concept as well as a big challenge to fintechs. Digital financial service Interoperability is another tall journey to walk by all participants who are dreaming about financial inclusion, not with one-night patience but with collaborative spirit.
