Public mistrust slows adoption of e-commerce in Myanmar

The use of electronic payments in Myanmar, particularly at shopping centres and in online shopping, has been slowly catching on since the government made digital technology a priority in the 2015 National Export Strategy.

In addition to banks issuing Myanmar Payment Union (MPU) cards for electronic payment, mobile wallet applications like CB Pay, KBZPay, AGD Pay and MAB Mobile have appeared. KBZ Bank, Myanmar’s largest privately-owned bank, this month announced that it had facilitated one million transactions via KBZPay.

Payment services via mobile phones like Ongo, Wave Money, M-Pitesan, and OK Dollar have also emerged.

Yangon Region is even planning an electronic fare payment system to replace cash on Yangon city buses.

Foreign payment applications are trickling into the country. This month, the Myanmar Central Bank approved a request by local firm Paypb Co Ltd, which is in partnership with Hong Kong-based QFPay, for a three-month pilot project to test digital payments using the WeChat application at 14 shops in Mandalay Airport and some shops in the country’s second-largest city.

The project is aimed at making payments more convenient for Chinese travellers by using WeChat, a mobile payment application developed by Chinese conglomerate Tencent.

Many foreign tourists want to use electronic payments instead of having to carry local currency, said U Sithu Phyo, managing director of Paypb.

Important for development

Electronic payments have become important to the country’s economic development. If the digital settlements and e-payment system doesn’t get stronger, the country’s economy will be left behind, according to U Aung Soe, director of the Export Promotion Department.

“Other countries have really advanced far in e-commerce and digital payments. They are becoming more important in trade, especially among the country’s youth, so we need to develop this sector,” he said.

However, experts in the field said it may take a long time to achieve this goal.

“Electronic payments are common in most ASEAN countries. The central bank is trying to reduce the use of cash in the country, but for electronic payments and e-Commerce to succeed, more public participation and government support are needed,” said U Zaw Lin Htut, an executive at MPU.

Also, consumers are afraid that their taxes will increase if they use digital payments, according to U Nyein Chan Soe Win, CEO and co-founder of Get Myanmar.

“E-payments are seen as more of a threat than a plus. People are worried that they would have to pay taxes when using digital payments. The government needs to make changes there. In other countries, the government gives tax subsidies to people for online business transactions.

Electronic payments are a better way for the government to collect taxes. “The government could get at least 3 percent tax on sales if they were all made online,” he said.

“Using a card or QR code would save money. A digital system would make it much easier for the government to collect taxes,” said U Nyein Chan Soe Win, so the government needs to promote this technology.

Shortfalls and setbacks

One of the obstacles to the widespread use of the technology in Myanmar is a lack of training.

“Exposure to technology and training are significant for the development of electronic payments. Even in Yangon and Mandalay, where people are familiar with technology, some employees do not know how to accept payments by phone or card, and sometimes ask for cash instead because the internet is down,” he added.

The Myanmar Central Bank’s effort to adopt the e-payment system has been slowed by obstacles, according to the bank.

Daw Myint Myint Kyi, director general of the bank’s Accounts Department, said that since the e-payment system is weak locally, if technology service applications are accepted from foreign countries, the government will not benefit from foreigners’ spending.

Economic expert U Aung Ko Ko said that although Myanma Posts and Telecommunications (MPT) has more than 24 million mobile phone users, Telenor has more than 19 million, Ooredoo has more than nine million, and MyTel has more than three million subscribers, relatively few people have bank accounts in Myanmar, which makes it difficult to develop an e-payment system based on mobile phones.

“The lack of electricity in rural areas is a major obstacle. Public acceptance of e-commerce depends on access to electricity, the internet and software,” he said.

The effort to develop an e-payment system is crucial to Myanmar’s economic success. However, its success depends on people trusting the system, enthusiastic government support, and access to electricity and the internet across the country.

Source: Myanmar Times

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