Cash is Still King in Myanmar But Visa Gains Ground


American payment technology giant Visa saw double digit growth in transactions in Myanmar in the past year, bolstering its efforts to break into a country dominated by cash.

The numbers of locals using Visa’s pre-paid cards abroad increased by 80% in the period between October 2015 to September 2016 while the actual amount spent by Myanmar people traveling abroad increased by 54%.

One of the biggest challenges for Visa in Myanmar is the “culture of cash” supported by longheld mistrust of financial institutions and a lack of infrastructure, which hinders cashless payment systems.

Cash payments still make up 99.5% of all transactions in Myanmar according to a study done this year.

“A lot of our efforts are focused on tourists,” said Aturo Planell, Visa’s Country Manager for Myanmar. He expressed frustration at online sites that continue to push the message that tourists can only get by in Myanmar by bringing in cash.

“We really want to fight the perception that Myanmar is a cash only country because the reality is that there is acceptance [of cards] out there, there’s the possibility of accessing cash through ATMs,” he said.

Visa’s Myanmar growth rests on making sure Myanmar people who go abroad use Visa, and on expanding the acceptance of Visa in Myanmar for tourists, he added.

Transactions on foreign issued Visa cards within Myanmar have increased 42% in the last year. This is thanks to a 49% rise in the number of outlets taking Visa and a 39% increase in the number of ATMs.

Visa began operations in Myanmar in 2012, when tourists numbers were just over 1 million and the country’s first ATM machine had been installed barely a year before. There are now approximately 2,000 ATMs in the country and 6 million foreign visitors are predicted in 2016, up 25% from 2015.

While Myanmar people with Visa cards can only use them outside the country, online purchases for products overseas whilst in Myanmar have grown by 180%.

“The primary categories we see that expenditure happening in are airfares and accommodation like hotels,” said Planell. “But we’re also seeing a very large trend in digital content, so people buying games and other types of digital content on platforms such as Facebook and Viber.”

Although Visa’s customer base is Yangon heavy, with the county’s main city accounting for 75% of sales volumes, growth in expenditures outside of Yangon is faster than within the city; 58% compared to Yangon’s 36%.

“As a result of this trend, we’re placing a lot of effort in working with our client partners to expand acceptance outside of Yangon to primary cities like Mandalay, Taungyi, Bagan and Ngapali – key tourist destinations,” said Planell.

Tourists from Asia accounted for 60% of all Visa transactions within Myanmar over the last year, a number which is set to increase with travel visa waver programs like the Thailand, Myanmar visa waver program enacted last year and the Singapore tourists visa waver program which came into effect on December 1st, said Planell.

“We’re really encouraged to see these trends continue to accelerate, and as Myanmar opens to the world and more airlines serve the market, we expect to see a healthy growth of inbound travellers,” he said.

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