The world is watching Myanmar today, especially with the World Economic Forum being held at its capital, Nay Pyi Taw.
As mentioned in a previous blog post, Burmese are still heavily dependent on cash, with many holding a deep distrust of the banking system and thus prefering to carry their savings in handâ€”literally. Less than 20% of adults are banked, and internationally connected ATMs were only just introduced this year.
However, a key theme that is being repeated is that Myanmar has the potential to skip interim development phases in the ICT and banking sectors.
According to Peter Maher from Visa, the undeveloped nature of Myanmar's infrastructureÂ is not a disadvantageâ€”but rather an opportunity for Myanmar to adopt best practices, learn from the mistakes of other countries, and implement advanced technology and payment services, unencumbered by antiquated systems.
Once a formal financial system is put into place, we should also see the development of electronic paymentsâ€”pre-paid, debit, credit, mobile and P2P remittances.
Despite the favourable starting point that Myanmar is at, in order for development to go all the way, Maher also highlights three factors which would be needed during these transitional years:
- The development of mobile infrastructure and mobile penetration
- Public and private partnerships
- Favourable regulation
However, consumer readiness plays a big part in the development of payments. We are still seeing a strong reluctance from consumers in Thailand and Vietnam to use electronic payments, so how can we expect Myanmar's consumers to so readily accept mobile payments and gain confidence in Myanmar's banking systems? Or, will the lack of a history of card usage accelerate the development of contactless, mobile, or biometric payments, since there are no entrenched habits to change?
Share your thoughts on the comments below!
Total Payments Asia will be looking closely at the payments development of Myanmar, and neighbouring countries Thailand, Vietnam, Laos, and Cambodia where we'll be delving more deeply into the payments landscape of the region. Visit our website to find out more details about the event!