The rise in mobile subscribers began after the government opened up the telecommunications sector in 2014, though enforced supportive regulations and point-of-sale (POS) payment solutions are still lagging behind.

Fitch Solutions, a subsidiary of New York-headquartered Fitch Group, published an analysis on Myanmar fintech industry trends highlighting that money transfer and microfinance sectors would spark the most interest from the private sector.

The microfinance sector will be burgeoning as more start-ups introduce solutions making loan approval process more efficient, it said.

There are several fintech companies focusing on peer-to-peer (P2P) money transfers, but the development in POS payment solutions has trailed.

In 2016, the Central Bank of Myanmar rolled out the Mobile Financial Services (MFS) regulation, allowing licensees to offer kyat-dominated cash-in and cash-out services, money transfers and domestic payments.

Applicants for the MFS require a minimum capital of K3 billion (US$2.5 million) and an application fee of 0.1 percent of the minimum amount. Fintech companies are allowed to apply for mobile banking licences, which were first issued in 2013 under the support of the Mobile Banking Directive. These licences are given to traditional banks, and fintech firms need to operate under a bank licence.

In 2017 following the allocation of an MFS licence to OK Dollar, a local mobile payment unit, the CBM received backlash from the government for allowing the company to operate without proper regulations and for bank’s lack of intervention.

Launched in 2016, OK Dollar operated on the basis of a tradition microfinance licence during the period it was waiting for a MFS licence.

Wave Money, a joint venture between telecoms operator Telenor and Yoma Bank, received an MFS licence in 2016. By late 2018, it amassed 7 million subscribers and had as many as 40,000 agents (where customers can deposit and withdraw cash),  processing transactions up to US$1.3 billion last year.

The CBM said in June that the use of UnionPay International QR code system would be launched within this year. The slow pace of rollout of POS payment solutions indicates that Myanmar’s large informal economy is still inclined to do business in cash.

Source: https://www.mmtimes.com/news/growing-mobile-penetration-gives-myanmar-fintech-big-boost.html