Ecommerce services for payment to start

Local consumers are increasingly taking to the web to make a deal, yet paying for products is still a major headache.

While services like US-based PayPal and China’s AliPay are making it easy for seamless e-commerce around the world, Myanmar is still a cash-based society, with few of the solutions that has helped drive online shopping in the rest of the world.

The Myanmar Payments Union, an enterprise owned by the domestic banks, is planning to launch a service allowing for online payments. It is already working with Cooperative, Myawaddy and United Amara, and is actively attempting to recruit more banks to take part in the service, said MPU chief executive U Zaw Lin Htut.

Currently most local e-commerce requires some form of cash payment. Some shops request pre-payment, meaning customers find a product they like on a website store but must pay a company representative cash before the order is filled. Since many shops import from overseas, this can add to the delay.

Other shops request payment after the good is delivered, but this leaves the shop owner at risk if the customer chooses not to pay.

MPU has been issuing essentially pre-paid credit cards since September 2012, with about 850,000 in use in the country. While the number of users is growing, U Zaw Lin Htut said it is still not enough for the country’s population.

“We need to widen our base, but still be thinking about the number of customers who use the banking system,” he said.

After MPU’s e-commerce service kicks off, its cardholders will be able to use their card number online to complete the purchase. This will remove the cost and risk from collecting payments – though

retailers said they still have to see the service before signing up.

“I don’t want to use e-commerce until it has attracted enough customers, because I worry about its inconvenience,” said Daw Thwe Khaing Zin, owner of Target for Chance online shopping.

Still, she acknowledged payment is a problem. Her shop no longer accepts pre-payment, as delays with distribution meant she was forced to break her promises too often.

Daw Thwe Khain Zin also said it is important that fees to use the e-commerce service are kept low, or shop-owners will be reluctant to sign up.

Rules governing e-commerce are still in the works, and the Central Bank of Myanmar may have to relax some restrictions before allowing the service.

Cooperative Bank managing director U Pe Myint said e-commerce is a frequent topic of conversation, with the bank planning to hold a workshop on the issue later this month. “Some customers using online shopping will use these services,” he said.

U Pe Myint added that transfers outside the country are currently not allowed, meaning international e-commerce payments may take some time to develop.

But with MPU, services could launch closer to home soon.

Source: Myanmar Times

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