Visa Hits Out at Central Bank Regulations

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Central bank regulations that bar people with domestically- issued Visa cards from making transactions within Myanmar are hindering the company’s expansion plans, according to a senior executive.

Arturo Planell, Visa’s Country Manager for Myanmar, said last week that the regulations were one of the reasons electronic payments have failed to make bigger inroads in the country’s cash economy.

“Today our business is a little limited by the scope of regulations, so that we have to focus on international travellers as well as Myanmar nationals
traveling abroad,” he told reporters. Electronic payments make just 0.5% of all transactions in Myanmar, Visa says.

Visa cards are issued by four Myanmar banks: KBZ, CB Bank, AYA and MAB, but central bank regulations stipulate that any payment instrument from a foreign payment network can only be used on outbound transactions. Transactions within Myanmar are forbidden.

“If the regulation was not there, those cards could be used domestically and we would be investing very heavily to support the local industry,” he said.

The Myanmar Payment Union (MPU), which included 23 state owned and private banks, is the most widely used electronic payment system in the country for ATM withdrawals
and point of sale purchases. But the service only recently began upgrading its systems to allow transfers between accounts from different banks and to be compatible
with foreign ATMs.

“Visa cards work well abroad because they have their own network but in Myanmar, paying through your visa card is risky because they don’t have access to their own
network,” said Daw Than Than Swe, Director General of the Payment & Settlement System Department under the Central Bank.

But mitigating risk is a big part of Visa Myanmar’s growth strategy, said Planell.“We ensure that all our partners are up to speed on the highest security standards out there… we’ve done a lot of work and we’re very happy with where we are today,” he added.

Proponents of e-payments say they reduce the un-taxable ‘grey economy’ and help keep track of payments to limit tax evasion and criminal transactions.

“There’s a lot of things that [the Myanmar authorities] have stated out there, things like driving inclusive growth, financial inclusion, reducing the grey economy,” said Planell. “Our message is let us help, we are here to help and we’d love to help.”

 

Source: Myanmar Business Today

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