2 years ago, I tried to #GoCashless in Myanmar. If you have not read my article from back then, here’s the link.
I do not think it would be surprising to you that I failed miserably back then. I encountered situations where I would often be greeted with “certain looks” whenever I tried to pay with Visa or mastercard. If that does not put you off, I am pretty sure having to pay 2% — 2.5% surcharge on every single transaction since merchants were not willing to absorb the merchant discount rate (MDR) would definitely do the magic. Merchants, I get it! You do not want to split some of your hard-earned profit to banks and often times, your profit margins were not even as high as 2.5%. Banks, I get it! You also have running cost and fees that you’d have to pay to Visa, mastercard, and others. Ultimately, the consumer, who wants to help everyone in the ecosystem to save the cost of handling cash, would have to foot the bill. If that does not put you off, how about having no cash but only cards in a dinner meeting with the in-laws for the first time? Yes, one could only blame me one for not carrying any cash. Some would call it living on the edge but many would call it crazy.
A quick glance at the ecosystem
Before we go deep dive on how you can #GoCashless, I want to establish some context on the payment space in Myanmar in general. Here are the different ways to you can pay without cash in Yangon -
Recently, KBZ announced that they had passed 2 million registered users (but not sure what the actual active user base is) in 6 months. In comparison, a digital bank in the UK called Monzo took 3+ years to get to 2 million. They leveraged on the very fact that they are the largest bank with 15,000+ employees by assigning aggressive consumer/merchant acquisition target to each and every employee including their CEO. Due to such acquisition, KBZPay probably has the widest merchant acceptance network.
These guys have the largest agent network with 47,000 agents across Myanmar. They recently rebranded their mobile application as WavePay to facilitate payments. It seems like Wave is focusing more on remittance and online payments as opposed to merchant payments.
CB Bank replaced its mobile banking app with CB Pay. That is how much they are betting on mobile wallets and payments. At the moment, you would still need to, physically, visit one of their branches to open a bank account. But this is a one-time event and you can use your bank account as a mobile wallet afterward.
These guys came early into the market but have not yet achieved strong presence until recently. Their agent network for remittance started growing again.
A similar proposition to CB Pay where you need to have a bank account with them in order to be using AGD Pay.
Visa / mastercard / JCB / UnionPay Debit and Credit Cards
There are no official statistics on the consumer adoption rate. But in Yangon, they have quite a good network of merchants.
If you have a bank account, there is a high possibility that you have an MPU card. The card’s also accepted in Yangon in key locations.
The biggest grocery retailer launched a loyalty mobile app which also has a top-up function with an ability to make cashless payments by scanning their proprietary QR code. Plus, you get additional points for making that transaction too.
My attempt at going cashless (again!) after 2 years
I have not yet been to the ATM machine in approximately 40 days which basically means that I have not yet had a single kyat in my wallet for the last 40 days. Okay, I am going to put a disclaimer here first before I get accused of being misleading. I have paid 5% of my transactions in the last 40 days in cash but without having to withdraw any money from the ATM machine. Here’s how I did it.
Using my Visa card
I have been using my Visa card (Mine’s a Myanmar Kyat credit card) quite intensively even before this experiment. I get slapped with the MDR surcharge from merchants sometimes but I have encountered that significantly lesser than before. I love the fact that I am able to review what I spent on and where I spent on by looking at my card statement at the end of the month. I noticed that the acceptance network in Yangon had widened significantly in the last two years and I am able to make payments in the majority of places that I frequent to — malls, restaurants, retailers and etc. The great thing is 95% of the time, it works. There is still that 5% where POS machines would be having connectivity issues. But compared to the last 2 years where poor cashiers had to put up the machine in the air to get connectivity, it is much better now. The most liberating experience is where I am able to take taxis through Grab via my Visa card. It saves so much time and energy not having to deal with small notes. Additionally, I get double Grab reward points which I use daily to make my rides cheaper.
However, I had experienced a few times where cashiers from various merchants would try and charge me in USD to my card instead of MMK. I’ve investigated this and found that the majority were trained to charge in USD every time they see a Visa or mastercard logo. When you face this, don’t panic. Just tell them that you’d like to get charged in MMK since the card was issued in Myanmar and that you would not pay if they charged in USD and that you did not bring any cash. It works most of the times. I also noticed that you tend to also get charged in USD sometimes when the POS machine is from a different bank than your card issuer. E.g. swiping your X-branded Visa card at Y bank.
Using mobile wallets instead of cash
On top of my Visa card, I have also been using one of the mobile wallets quite regularly. I find that there are a lot of micro-SMEs who already accept different forms of mobile wallets. I now use my mobile wallet to pay every single time I visit my favorite café.
Earlier, I told you that I use cash for 5% of my transactions without having to withdraw cash. The trick is really in peer-to-peer payments. Every time I know that I have to pay in cash, I would ask a colleague, a friend or a family member to pay for me first and then transfer them back the owed amount via my mobile wallet. So, every time I’d order lunch from a friend, I’d pay him/her back via my mobile wallet. Every time I’d have to go to a petrol station, I’d do the same! This led me to find an interesting observation that actually, by transferring back the owed amount to their mobile wallet, it actually encourages them to use their mobile wallets more. From there, I am hoping that there would be a viral effect.
My only complaint right now is that such wallets are not interoperable but that is going to be changed pretty soon through the standardization of QR code for payments via the Central Bank of Myanmar. That will be a massive push for building a better cashless society.
The cashless future
Regardless of the challenges aforementioned, I find that my cashless experience, so far, has been extremely pleasing. Between these two methods, I was able to stay away from the ATMs for the last 40 days and I am going to continue to try and stay that way.
All the players within the ecosystem had played their part to empower consumers with the ability to make cashless payments. But that’s not enough. In order to truly promote the digital economy and to reduce the cost of having to handle cash, we, as consumers, need to move away from cash as much as possible. Once, we start adopting more and more means of paying cashless, more and more merchants will start accepting different means of cashless payments. This type of behavior change can only be driven by us, the consumers. And at the end of the day, consumers benefit the most. How convenient would it be to not have to carry the moldy kyat notes? How great would it be to be able to review your transactions at the end of the month in detail? How amazing would it be to not worry about someone stealing cash in your wallet ever again? The banks would also start to understand more about you as their customer and be able to offer you better personal financial products that you need. Once more and more people use cashless payments, we would also see massive growth in the online commerce sector due to the ease of transaction. Across the board, it just creates so much social and economic benefits and opportunities for society.
I urge you to take this leap forward. #GoCashless. It will annoy you at first but trust me, that’s only temporary. Once you get a hold of it, it is revolutionary. If you’d like to join me in this journey, I humbly ask you to help to create bigger awareness about this movement by tagging #GoCashless and talk about a transaction that you had done recently without any cash on social media. Keep making cashless payments daily until you have zero need for cash. I look forward to seeing you on the other side.