GIVEN THAT the majority of Myanmar people lack the knowledge to use digital payment platforms, all the players in the finance industry must work together to educate them so the nation can become a cashless society, according to Arturo Planell, country manager of Visa Myanmar.
He said at a recent press conference there was a clear gap in financial knowledge.
“Now is the time for the industry to come together and support consumers with the necessary skills and information to manage their personal finances,” he said.
“Driven by the rapid growth of smartphone penetration in Myanmar, the cashless society is possible. The change is possible over the next three or four years. It is a really big opportunity. But, this will not happen unless we educate the people.”
Last week, the firm launched a report on Myanmar people’s perceptions, attitudes and behaviours towards financial payments. In addition to quantitative data collection of 1,044 people in five cities-Yangon, Mandalay, Taunggyi, Pathein and Magwe, the study also included in-depth interviews to delve deeper into the attitudes of distinct consumer segments. The study was done in the second half of last year.
Citing the findings of its comprehensive study, Planell said only 36 per cent of Myanmar people are easy to understand banking products and services.
According to Planell, the nation’s economic trajectory has been on an accelerated rise – with no slowing down in sight.
“To cope with the new speed of development, it falls upon the banking and finance industry, in conjunction with Myanmar authorities, to educate people on how best to manage their personal finances and how they might benefit from increased digitalisation of payments,” he said.
He believes moving from cash to digital payments will provide enormous advantages to the people of Myanmar, as electronic payments added 55 billion kyats to Myanmar’s economy from 2011 to 2015.
“We do believe that electronic payments provide more reliable and more convenient way to pay for various services. Real tangible benefits driving economic growth include increasing transparency, helping the government get more tax revenues, and financial inclusion,” he said.
“People need to understand the opportunities brought by modern banking and digital payments. I am confident providing Myanmar people with financial knowledge will improve lives and grow the national economy.”
According to the findings of its recent study, what is most shocking to Planell is a significant rise in Myanmar people’s trust in banks and financial institutions.
“This is the most surprising to us. Until the past few years, people did not trust in banks very much because some people had lost their money in the previous credit crisis in 2003. Now we have found out that the majority of the people see banks as a safe place to store their wealth,” he said.
To him, motivations for opening new bank accounts include earning interest on their money, easier access to their money with a bank account and an ATM (automated teller machine) card, and keeping up with times, driven by a feeling that everyone has an account nowadays.
“Good news for the industry is that 49 per cent of the respondents intend to get a bank account within the next 12 months,” he said. The study shows that 38 per cent of urban adults have a bank account.
While the majority now sees banks as safe, trustworthy and transparent, 36 per cent of the respondents still do not see the need for banks in their daily life. Three in five people surveyed said that they expect their financial situation to be better a year from now than it is today. A further 69 per cent agreed that the next generation would be better off financially than the current generation.
Planell however admitted cash remained as the most commonly-used form of payment in Myanmar.
“Being over-reliant on cash for a very long time and without option to use other payment methods, most people still believe cash is superior to cards and mobile payments,” he said.
To him, the most used financial service is the most basic one- remittance services to send or receive money. Only 14 per cent of the respondents have ever shopped online and their frequency of shopping is low.
“Today there are high levels of understanding of traditional financial tools, such as remittances, gold and land investments, but there is real need for more knowledge around topics such as bank accounts, electronic payments or insurance - half of urban consumers are not yet aware of credit cards or insurance,” he said.
The ability to make bill payments, split bills between friends, get instant notifications and receive awards and privileges will trigger consumers to switch to mobile payments, he said.