Burma’s Central Bank has given private lender Cooperative Bank the green light to issue internationally accepted prepaid debit cards, a senior Central Bank official said this week, in a first for the country’s antiquated financial system.
The “Easi Travel” prepaid card was made available this week for pre-order, and holders-in-waiting are being told the cards will be in their hands by Oct. 1 for use on transactions in Burma and abroad.
CB Bank, which will be the nation’s first lender to issue the cards, is working with MasterCard to bring the service to its customers. The card has already been tested at banks in Thailand, Singapore, China and the United Kingdom, CB Bank Managing Director Pe Myint told The Irrawaddy last week.
CB Bank—chaired by presidential advisor Khin Maung Aye—has also agreed to work with Visa, and will begin development of a similar Visa-branded card after the MasterCard version has been rolled out.
“We have already had a lot of meetings to allow it [CB Bank to issue the cards],” a senior official from the Central Bank told The Irrawaddy this week, saying CB Bank was the only lender currently in talks with the Central Bank.
The official, who spoke on condition of anonymity, said the Central Bank had to weigh several factors before giving the go-ahead to CB Bank, including the potential macroeconomic effects of the new prepaid cards—and eventually, credit cards.
“We had to consider many issues in allowing the issuance of such cards, as well as credit cards. … As far as we know, right now money inflows and outflows are not balanced; money outflows from the country are more than inflows, meaning we will allow [prepaid cards first] while we can adjust at a later date,” he said, referring to a timeline for the issuance of internationally accepted credit cards as well.
The prepaid card, likely to be offered in one-time-use and reloadable versions, will be available to CB Bank account holders only. CB Bank announced that it would begin accepting pre-orders for the card beginning on Sept. 24.
Some of Burma’s other private lenders, including Asia Green Development (AGD) Bank and Kanbawza Bank, are approaching the issuance of prepaid debit cards with more hesitancy.
“Economic sanctions remain in this banking sector, we have to use caution,” said Than Lwin, vice chairman of Kanbawza Bank.
AGD Bank, owned by the US blacklisted business tycoon Tay Za, is in talks with MasterCard about a prepaid card partnership but will not be leading the charge on the offering, Ye Min Oo, the managing director of the bank, told The Irrawaddy.
“We have a plan but we will not be the first bank issuing this prepaid card,” he said.
Work to facilitate the issuance of internationally accepted prepaid cards is being carried out separately by the Myanmar Payment Union (MPU), a grouping of 14 of Burma’s 19 private banks that allows the banks to issue mutually accepted debit cards. Those cards do not work overseas, however, frustrating migrant workers and outbound Burmese travelers.
The Central Bank official expressed optimism that the forthcoming prepaid cards would ameliorate this financial hassle for Burmese nationals traveling abroad.
Source: THE IRRAWADDY