March 10, 2023 | By Jason Myat, Ruth Aung
March 10, 2023 | By Jason Myat, Ruth Aung
Let's Skip the Cash
Let's Skip the Cash
In the previous article, we discussed about how the dominance of cash has an adverse influence on consumer behaviour during the transformation era of Myanmar. However, with regard to the payments sector, COVID-19 and its repercussions have given Myanmar consumers the drive they needed to shift the payment system. The rate of digital adoption in Myanmar’s banking and e-commerce industries has grown due to the development of e-commerce as well as Covid. Covid was not the only factor encouraging the shift of the payment system in Myanmar.
In the previous article, we discussed about how the dominance of cash has an adverse influence on consumer behaviour during the transformation era of Myanmar. However, with regard to the payments sector, COVID-19 and its repercussions have given Myanmar consumers the drive they needed to shift the payment system. The rate of digital adoption in Myanmar’s banking and e-commerce industries has grown due to the development of e-commerce as well as Covid. Covid was not the only factor encouraging the shift of the payment system in Myanmar.
A Need for Solution
A Need for Solution
By offering solutions to pressing challenges like low mobile access and network infrastructure in the past few decades, the telecommunication and fintech businesses made every effort to steer Myanmar into the digital paradigm. According to Myanmar Digital Contents & Vas Association report, 72.41% of the population use smartphones by 2020 and these numbers are likely to have increased since then. Presently, social media access and financial services like internet banking are mostly the focused-factors through smartphones. This data shows Myanmar’s rising digital literacy rate, which once served as an impediment to the payment transformation.
By offering solutions to pressing challenges like low mobile access and network infrastructure in the past few decades, the telecommunication and fintech businesses made every effort to steer Myanmar into the digital paradigm. According to Myanmar Digital Contents & Vas Association report, 72.41% of the population use smartphones by 2020 and these numbers are likely to have increased since then. Presently, social media access and financial services like internet banking are mostly the focused-factors through smartphones. This data shows Myanmar’s rising digital literacy rate, which once served as an impediment to the payment transformation.
Even if the prevalence of digital literacy is improving, people in rural areas still find it difficult to create bank accounts since banking services do not reach every one of those areas. Fintech and telecom firms, however, have developed mobile applications for digital payments that do not require a bank account for unbanked population such as smallholder farmers, to track their transactions and to establish credit history as a solution to this problem. Digital payment systems have the potential to make credit more accessible to the unbanked population, allowing them to potentially get better mortgages at favourable terms by removing the barriers to acquire traditional bank loans.
Even if the prevalence of digital literacy is improving, people in rural areas still find it difficult to create bank accounts since banking services do not reach every one of those areas. Fintech and telecom firms, however, have developed mobile applications for digital payments that do not require a bank account for unbanked population such as smallholder farmers, to track their transactions and to establish credit history as a solution to this problem. Digital payment systems have the potential to make credit more accessible to the unbanked population, allowing them to potentially get better mortgages at favourable terms by removing the barriers to acquire traditional bank loans.
Another issue conspiring against the transformation is payment security; clients in Myanmar had doubts about utilising digital payments. Customers will resort back to the aesthetic value of cash transactions, which have their own risks of fraud, loss, and errors, the moment they begin to feel uncertain. For digital payment models, ensuring payment security is crucial, as is showcasing the simplicity to accept payments and retrieve money. Several Fintech companies had success persuading Myanmar clients of the security of digital payments starting from the past few years. The Central Bank of Myanmar reports that by the end of 2019, there were 2 million POS transitions. The e-commerce market value was 6 million dollars at that time which indicates a widespread adoption of cashless transactions.
Another issue conspiring against the transformation is payment security; clients in Myanmar had doubts about utilising digital payments. Customers will resort back to the aesthetic value of cash transactions, which have their own risks of fraud, loss, and errors, the moment they begin to feel uncertain. For digital payment models, ensuring payment security is crucial, as is showcasing the simplicity to accept payments and retrieve money. Several Fintech companies had success persuading Myanmar clients of the security of digital payments starting from the past few years. The Central Bank of Myanmar reports that by the end of 2019, there were 2 million POS transitions. The e-commerce market value was 6 million dollars at that time which indicates a widespread adoption of cashless transactions.
Why Embrace Digital Payments
Why Embrace Digital Payments
As the volume of digital transactions has expanded, customers and corporations alike have recognised the convenience and effectiveness of digital payment systems like mobile wallets and individual payments. By making payments more convenient and easy, the economic growth can be promoted by cashless payment systems and enhance consumption as well. The key benefits of digitising the payment process include chances for corporations and smartphone users to save time and resources as cross-border transactions may be completed digitally in a matter of seconds.
As the volume of digital transactions has expanded, customers and corporations alike have recognised the convenience and effectiveness of digital payment systems like mobile wallets and individual payments. By making payments more convenient and easy, the economic growth can be promoted by cashless payment systems and enhance consumption as well. The key benefits of digitising the payment process include chances for corporations and smartphone users to save time and resources as cross-border transactions may be completed digitally in a matter of seconds.
Digital payment facilitates convenience while also fostering economic growth, as stated in the benefits above. Government and FinTech companies are taking every measure to inspire Myanmar to enter the modern transformation with positive outcomes. By analysing the existing scenario, we can predict that Myanmar’s payment system would eventually change to one where the majority of transactions take place digitally. In a few years, the majority of people will use digital payments to skip the cash.
Digital payment facilitates convenience while also fostering economic growth, as stated in the benefits above. Government and FinTech companies are taking every measure to inspire Myanmar to enter the modern transformation with positive outcomes. By analysing the existing scenario, we can predict that Myanmar’s payment system would eventually change to one where the majority of transactions take place digitally. In a few years, the majority of people will use digital payments to skip the cash.