There is a popular Burmese saying, “ရော့ပတ္တမြား၊ ရော့နဂါး” (literal translation: here is ruby, here is dragon), which describes the valued method of exchanging cash and goods upfront between two parties, to ensure that both are not left shortchanged.
In Myanmar, this ‘Cash is King’ mindset and preference for face-to-face transactions are deeply entrenched in people’s everyday lives. Even in e-commerce, cash-on-delivery (COD) is the preferred payment method, constituting 85 per cent of all payments. Some retailers may have gone digital, but payments remain traditional – the delivery man has simply taken on the role of the cashier.
The COVID-19 outbreak has challenged this mindset as physical contact is now seen as undesirable –and more businesses and customers are seeing the potential of digital payments.
How do we go digital?
Many players have addressed the topic of transforming Myanmar into a digital society. On a macro-level, stakeholders have emphasised the importance of technology and infrastructure, while others have urged for greater governmental support.
There are more initiatives that can be implemented, such as switching to a computerised ID verification system or credit register to easily detect and prevent fraud or promoting interoperability between banks.
Nonetheless, the time seems ripe for Myanmar to take the leap. Infrastructure is in place and expanding – Myanmar’s mobile phone connectivity is over 95 per cent and almost three-quarters of Myanmar’s working population owns a mobile phone.
The COVID-19 pandemic has also compelled the Myanmar government to show strong support for digital payments as it reduces physical contact between people.
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What’s holding us back?
The simple answer is cultural habits. Culture takes time to evolve. On a micro-level, it’s not easy to switch from paying in cash over the counter physically at a store (offline payments), to logging on to the website or app of the store and paying via mobile wallets or cards (online payment).
This explains why hybrid models such as COD, which allow shoppers to browse online and then pay the delivery man in cash in exchange for their purchase, have remained popular amongst the Myanmar people.
Our younger generation, who are growing up with technology, may have no issues adopting digital payments right off the bat. But the older generation, who have emerged from a closed-off society for over half a century and suffered through the banking crisis in 2003, naturally have their reservations.
And it shows – 40 million or 70-75 per cent of our local population still do not have a bank account. Face-to-face transactions provide that complete assurance and Myanmar people are not ready to give that up just yet.
Keep moving forward
As Martin Luther King has said, “If you can’t fly then run, if you can’t run then walk, if you can’t walk then crawl, but whatever you do you have to keep moving forward.”
What we can do is not entirely remove the option of face-to-face transactions but gently nudge society towards a world of digital payments. Payment models such as COD encourage Myanmar people to go online to shop as a start.
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Change can also be encouraged by equipping the main agents of face-to-face transactions: the cashiers and the delivery men. Retail and delivery businesses can offer customers a variety of payment options such as cards, wallets and cash through partnerships with payment aggregators.
Since May, for example, a significant number of modern retail stores now accept payments from multiple wallets. Customers simply present a dynamic and limited-time QR code to the cashier during their checkout eliminating the need to use cash.
Payment aggregators bridge the gap by offering a quick digital payment solution while retaining the face-to-face medium.
Over time, as people experience technology and its benefits, making the switch to digital payments will become more natural. They will start seeing how digital payments can transform their daily lives, even without a bank account.
Our people will not have to queue half a day in front of the electricity office under the sun just to pay their electric bills when they can pay anytime and from anywhere via their mobile phones.
Of course, digital payment acceptance between merchant and customer is just one aspect of a digital ecosystem. There are other connections that can be digitalised, like the one between the merchant and its suppliers (payouts) or between customers (transfers and remittance).
At the core of it all, we need to understand the rationale behind people’s payment habits and offer a pragmatic transition to digital payments. Achieving a truly digital society involves plenty of steps and a concerted effort by every player.
Together, step by step, we are edging closer.
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