Central Bank plans level playing field for foreign payment firms

A Visa payment sign sits on a reception desk at a restaurant in Yangon. Photo: AFPA Visa payment sign sits on a reception desk at a restaurant in Yangon. Photo: AFP
CB Bank and KBZ have both partnered with Visa following the Central Bank’s decision to allow foreign payment firms to operate independently in Myanmar. But the Central Bank has clarified that this is a select response to requests from four specific firms, not an official shift in policy.
Visa and KBZ issued a joint press release on January 12 announcing their partnership, and that as a result Myanmar citizens would be able to make payments at any one of Visa’s global network of around 40 million outlets and at more than 3500 outlets in Myanmar.

“Before this [Central Bank] announcement, international card providers have not been allowed to provide services domestically,” the release said.  

U Win Thaw, director general of the bank’s Foreign Exchange Management Department, initially declined to comment on the Visa press release because he said that aspects of it were incorrect.

He referred questions to the Payment and Settlement System Department, which said that in fact the Central Bank had made no “official announcement”.

“It is not like an announcement that the Central Bank is allowing all international companies to operate in the domestic payment service industry,” said department director general Daw Than Than Swe. “But Visa, MasterCard, JCB and Union Pay requested permission.”

Although the KBZ-Visa press released said that international card providers had not been able to provide services in Myanmar, in fact firms like JCB and Union Pay are already providing debit and credit card services to banks like KBZ, CB Bank and AYA Bank.

These cards, however, are co-branded with the international firm providing access to its international network and local company Myanmar Payment Union (MPU) supporting domestic payments.

CB Bank launched an international credit card in June 2016 branded with the MPU and UnionPay International stamps. A few months later AYA Bank became the first bank to issue a dual-branded JCB-MPU card.

 “Foreign companies were already allowed to do co-branding with local companies,” said Daw Than Than Swe. “But now they are asking permission [for access to the domestic market] saying they don’t want to work with co-branding.”

The regulator granted this request and is allowing these companies to offer services without cooperating with MPU, she said. But any other international payment firm would have to seek permission first before entering the market.

“We have granted permission to these four firms, but it is likely that [we] will have to create a level playing field for other international organisations if they for ask permission.”

KBZ and Visa said their first product would be released “soon”.  

CB Bank announced its intention to issue Visa cards on January 17. Like KBZ, the card can be used to make kyat-denominated transactions in Myanmar, and foreign currency payments overseas.

“Anyone can apply for credit card,” said CB’s general manager U Zayar Aung. “But we limit the spending amount depending on applicant’s monthly income and other conditions.”

CB Bank is also planning to double its number of domestic ATM terminals, and has hired German firm Diebold Nixdorf to help provide cardless cash withdrawls at ATMs, according to a press release issued yesterday. CB Bank customers will be able to use their mobile devices to generate a one-time PIN number to withdraw money, it said.

Source : Myanmar Times