Interbank cash transfers available with single ATM card next year

Money transfer services will be available through a single ATM card from next year onwards, U Mya Than, non-executive director and former chair of Myanmar Payment Union (MPU), told The Myanmar Times.

With a single ATM card issued by any of the 23 local banks under the MPU network, users will be able to perform multiple functions such as make interbank money transfers and withdrawals at the ATM without having to go to a bank. The service will go live at the beginning of next year.

“When this function becomes active, services involving the transfer of cash will be enhanced. So, MPU is trying to complete the necessary procedures quickly,” said U Mya Than.

MPU was formed by a network consisting of 23 domestic banks permitted by the Central Bank. By holding a MPU card from any of those banks, cash can be withdrawn from the ATMs of the other banks within the network.

Currently, transferring money between the different banks in the network is done through fax and email, making it a cumbersome and time-consuming process for customers. In addition, a bank employee has to physically provide that service, the efficiency of which depends on the employee’s level of knowledge and experience.

“Currently, the interbank market is not that extensive, so interactive functions cannot be properly carried out. If it can be properly done, then the usage of paper money will decrease considerably. In foreign countries, the majority of the banks almost no longer use paper money. Myanmar needs to be heading up this path,” said U Mya Than.

In fact, the ATM card service by MPU banks had actually been slated to launch this year, but things were held back owing to glitches in infrastructure.

To link up all the banks on the MPU network, the necessary infrastructure needed was software, which MPU purchased from China. The software is now being replaced by a one developed in the US and this caused delays. The installation of the new software will now be completed in December 2017 before launching in early 2018, U Mya Than said.

Financial inclusion

The move comes amid a domestic push championed by the banks towards financial inclusion, which has intensified in recent years on the back of rising digital and mobile phone penetration.

The arrival of new technologies enabling mobile financial services and online transactions to take place has accelerated the pace at which banks are moving to remain relevant in this new age.

Indeed, the small fraction of people who are now using banking services represents one of the biggest challenges in the way of further development in the Myanmar banking and finance industry.

“That’s why arrangements must be made to increase the people using banking services like mobile banking, U Soe Min, vice-chair of the Central Bank of Myanmar, told The Myanmar Times.

Among the issues holding the sector back is the fact that domestic banking businesses can only provide remittance services between branches of the same bank. Remittance procedures between one bank and another are still weak and archaic.

The other issue is that most bank branches are found only in the more developed States and Regions, which excludes the rural population. To be sure, most of those using banking services are urbanites making up just 20pc of the Myanmar population,

Furthermore, only 5 local banks have been permitted to open more than 50 branches. Kanbawza Bank has the largest network of 156 branches, while Cooperative Bank has 79 branches. Global Treasure Bank has opened 77 branches, Ayeyarwady Bank has 58 and Yoma Bank has 54.

So, only the banks with large branch networks are able to efficiently provide remittance services from one Region to another. As such, banks with fewer branches will need ATM functions to facilitate remittances between banks. Currently, only 15 out of the 23 banks are able to provide interbank ATM services.

“Traditionally, we just don’t have much interaction with the banking business. We have to conduct much more educational programmes and work. We need to move forward with a strategy involving mobile banking,” said U Soe Min.

In fact, if the MPU card system is successful, the MPU will next make efforts to promote mobile interbank remittance services, U Mya Than said.

Source: Myanmar Times

To see the original article click link here

NB: The best way to find information on this website is to key in your search terms into the Search Box in the top right corner of this web page. E.g. of search terms would be “property research report”, ”condominium law”, “Puma Energy”, “MOGE”, “yangon new town”,”MECTEL”, “hydropower”, etc.

 Opportunities from COVID19

.

Looking for foreign investors to invest in your business in Myanmar