Visa Inc. (V) and MasterCard Inc. said
payments using mobile phones will help Myanmar reduce the use of
cash when wireless networks are rolled out across Southeast
Asia’s poorest country starting this year.
The world’s biggest electronic payments companies
emphasized the potential for mobile-phone payments in Myanmar,
where the government is preparing to grant two new
telecommunications licenses at the end of this month.
“In markets where you don’t have that fixed infrastructure
in place, it may well be that mobile acceptance is going to be
the way to go,” Matthew Driver, MasterCard’s Southeast Asia
head, said in an interview yesterday in Naypyidaw. “There’s a
great opportunity to leapfrog.”
Making mobile phones available to the wider population in
Myanmar, where fewer than one in 10 out of 64 million people now
own a handset and the majority of transactions are made in cash,
would make electronic payments possible. This would mirror the
development in the last few years in African countries such as
Kenya, where a mobile money transfer system is used to transact
more than $900 million a month.
“Some of these economies in terms of telephony, they’ve
leaped forward one whole generation, they never had good fixed-line connections,” said Sandy Mehta, chief executive officer of
Value Investment Principals Ltd. in Hong Kong. “They’ve skipped
the fixed lines of the 1980s and 1990s. That makes sense for
players like MasterCard (MA) and Visa.”
Visa and MasterCard are among attendees at the three-day
World Economic Forum on East Asia hosted by Myanmar this week.
Telecom Rollout
Myanmar is in the final stage of selecting winners for its
telecom licenses. The country plans to boost coverage to as much
as 80 percent by 2016 and to make services affordable, the
government said in January. There were 5.44 million mobile-phone
subscribers as of December, or 9 percent of the population.
With mobile payments, “there’s less capital involved and
they don’t have to go through the brick and mortar of having
ATMs and branches,” Mehta said. “When they are targeting the
younger generation on a go-forward basis, mobile payments makes
a lot of sense.”
Bidders for the licenses in the final round include
Singapore Telecommunications Ltd. (ST) together with KBZ Group and
Myanmar Telephone Co.; a consortium led by Digicel Group Ltd.,
billionaire George Soros and Myanmar property developer YSH
Finance Ltd.; and Norway’s Telenor ASA.
African Model
People in frontier markets are more likely to get a
wireless handset before a bank account or even a fixed-line
telephone, providing an opportunity for payment networks and
phone companies to offer mobile payment services.
“We are hoping Myanmar can leverage some of the
opportunities” with mobile payments, Peter Maher, Visa’s
Southeast Asia head, said in an interview in Naypyidaw, the
nation’s capital, yesterday. “The people in Myanmar have no
legacy issues, so they can take advantage of the digital era.”
Kenya’s Safaricom Ltd., in which Vodafone Group Plc owns a
40 percent stake, is the inventor of M-Pesa, a mobile money-transfer system that is used to transact 80 billion shillings
($940 million) a month. Kenya is the most advanced country for
mobile payments, Visa said Feb. 13.
More transactions are carried out using M-Pesa within Kenya
than are processed globally by Western Union Co. (WU), the world’s
biggest money-transfer business, according to the International
Monetary Fund.
First Mover
MasterCard became the first payments network to issue a
license to a Myanmar bank in September when it signed an
agreement with Co-Operative Bank Ltd., as the Southeast Asian
nation moves toward integrating with the global financial system
after half a century of military rule.
The card companies expect debit and prepaid cards will be
the first to be introduced in the country, rather than credit
cards, MasterCard’s Driver and Visa’s Maher said.
Visa may first issue prepaid cards for Myanmar businessmen
traveling overseas for work this year so they don’t have to
carry cash with them, Maher said.
“We have a high degree of confidence” that the rollout of
the cards will happen this year, Maher said. To do that, Visa is
working with seven local banks it has partnered with in Myanmar,
including Kanbawza Bank Ltd. and Myanmar Oriental Bank Ltd.
The number of automated teller machines in Myanmar that can
access Visa’s transaction network may double to 300 this year
from the current 150, Maher said.
Tourism Boost
Growth in the country’s tourism industry will be the main
driver for electronic payments, which could help create more
businesses and jobs for local companies, according to Maher and
Driver.
Myanmar plans 38 tourism projects valued at $500 million,
the government said in a joint statement with the Asian
Development Bank and Norway’s government. With continued
economic, political and social reforms, international visitor
arrivals are forecast to increase sevenfold to as many as 7.5
million in 2020, with tourism receipts set to reach $10.1
billion, according to the statement.
That growth means the tourism industry could provide as
many as 1.4 million jobs by 2020, according to the plan.
President Thein Sein has allowed more political freedom and
loosened economic controls since coming to power two years ago,
prompting nations including the U.S. to ease sanctions and
attracting companies such as Coca-Cola Co., Ford Motor Co. and
Unilever NV. (UNA)
To contact the reporters on this story:
Kyunghee Park in Singapore at
kpark3@bloomberg.net;
Yoolim Lee in Singapore at
yoolim@bloomberg.net
To contact the editor responsible for this story:
Lars Klemming at
lklemming@bloomberg.net
Visa to MasterCard See Mobile Use Helping Myanmar Go Cashless
Dario Pignatelli/Bloomberg
Making mobile phones available to the wider population in Myanmar, where fewer than one in 10 out of 64 million people now own a handset and the majority of transactions are made in cash, would make electronic payments possible.
Making mobile phones available to the wider population in Myanmar, where fewer than one in 10 out of 64 million people now own a handset and the majority of transactions are made in cash, would make electronic payments possible. Photographer: Dario Pignatelli/Bloomberg
June 5 (Bloomberg) — Matthew Driver, president for Southeast Asia at MasterCard Inc., talks about the company’s business strategy for Myanmar.
He speaks from the World Economic Forum on East Asia in Nay Pyi Taw, Myanmar, with Haslinda Amin on Bloomberg Television’s “Asia Edge.” (Source: Bloomberg)
June 6 (Bloomberg) — General Electric Co. Vice Chairman John Rice talks about investment opportunities in Myanmar and the prospects for the nation’s economic growth.
He speaks from the World Economic Forum on East Asia in Nay Pyi Taw, Myanmar, with Haslinda Amin on Bloomberg Television’s “On the Move.” (Source: Bloomberg)
Visa to MasterCard See Mobile Use Helping Myanmar Go Cashless
Dario Pignatelli/Bloomberg
A man uses a Kanbawza Bank Ltd. (KBZ Bank) automated teller machine (ATM) next to a Co-operative Bank Ltd. (CB Bank) ATM at a shopping mall in downtown Yangon. MasterCard became the first payments network to issue a license to a Myanmar bank in September when it signed an agreement with CB Bank.
A man uses a Kanbawza Bank Ltd. (KBZ Bank) automated teller machine (ATM) next to a Co-operative Bank Ltd. (CB Bank) ATM at a shopping mall in downtown Yangon. MasterCard became the first payments network to issue a license to a Myanmar bank in September when it signed an agreement with CB Bank. Photographer: Dario Pignatelli/Bloomberg
Visa to MasterCard See Mobile Use Helping Myanmar Go Cashless
Dario Pignatelli/Bloomberg
The Visa Inc. and Mastercard Inc. logos are displayed on the side of an automated teller machine (ATM) as a customer withdraws money at a shopping mall in downtown Yangon. Visa may first issue prepaid cards for Myanmar businessmen traveling overseas for work this year so they don’t have to carry cash with them.
The Visa Inc. and Mastercard Inc. logos are displayed on the side of an automated teller machine (ATM) as a customer withdraws money at a shopping mall in downtown Yangon. Visa may first issue prepaid cards for Myanmar businessmen traveling overseas for work this year so they don’t have to carry cash with them. Photographer: Dario Pignatelli/Bloomberg
Visa, MasterCard See Mobile Payments Growth in Myanmar
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