Wednesday, June 28, 2017
The Myanmar Times
The Myanmar Times

Wireless banking just months away

Banks in Myanmar will begin allowing mobile banking for domestic remittance in July or August, executives said.

U Tin Maung Htay, managing director for Small and Medium Industrial Development Bank, said domestic banks are in the final stage of preparing for mobile banking – a process that began two years ago – and that they have identified the major hurdles.

“The main problem is telecoms,” U Tin Maung Htay said, adding that networks are unreliable, especially during bad weather, and this could interrupt transactions made over the phone. “We have to make sure poor Internet and phone line connections do not cause payments to be missed. It’s a matter of reputation.”

Another issue yet to be resolved, according to U Tin Maung Htay, is whether the system will operate directly from bank to agent or whether payments will be routed through the Myanmar Payment Union, which was set up last year by 17 state-owned and private banks to make payments between banks more convenient.

U Pe Myint, the managing director of Cooperative Bank, said mobile banking in remote areas will require banks to select reliable agents. Customers who remit small amounts of money can use agents, but it will be trickier for those who want to transfer large amounts of cash to remote areas because agents may not have it on hand, he added.

U Pe Myint also said a “code” system will be used to ensure the security of remittances.

A spokesperson for the director of the Central Bank of Myanmar said rules and regulation for mobile banking are currently being finalised and will be announced within two months, but added that this could happen within weeks. “We’re in final stage. We’re gauging how it can benefit people and will act as soon as possible.”

Numerous foreign and domestic technology companies are involved in the preparations and will participate in the service.

The central bank spokesperson said most mobile banking transactions are likely to be small. “This system targets small amounts, like cash sent by a worker in Yangon to his family in a village.”

Most domestic banks are eager to implement the system, he said. Although it presents risks for the banks, IT and telephone companies involved, he was confident these could be handled.

“Our banks have considered all of the possible problems and can deal with them,” the spokesperson said.