Fintech is one of Southeast Asia’s fastest growing industries fueled by the startup industry. However, when it comes to fintech, Myanmar is a bit behind in the race.
There are very few players in the industry, but that is due to change as the government has continued their push for digitisation as part of the Covid-19 Economic Relief Plan.
To get a clearer view of the Myanmar fintech industry, we had a chance to speak to NearMe‘s CEO Lynn Htaik Aung. Fresh off their recent funding round, they provide a digital purchases and payments platform for retailers, and are looking to expand its digital solutions to its retail partners
With change on the way, we are looking forward to seeing change in Myanmar’s fintech landscape. This is what Lynn had to share.
Congrats on the funding. How are you planning to use the investment?
Thank you. We will use the funding to extend our digital services and payments to more retailers and SMEs in Myanmar in our push to digitize the nation.
What were the challenges in scaling a fintech firm in a market like Myanmar?
Since Myanmar’s economy began opening up in 2010, access to financial services have been slowly growing throughout the decade.
There are certain challenges:
- Myanmar is largely a cash-dominated society, with 40 million (~75%) of its population unbanked.
- No computerised ID verification system or credit register
- This makes it difficult to prevent fraud and assess credit risk.
- Lack of interoperability between banks
- Limited interbank transfer makes it less convenient for merchants and customers to transact or move money.
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Where does Myanmar compare from a fintech perspective to the rest of Southeast Asia?
Myanmar’s fintech market represents 1% of ASEAN’s, with much growth potential.
Nonetheless, our telecommunications infrastructure has been progressively established in the past few years, and we now have 5G networks.
Myanmar’s mobile phone connectivity rate grew from less than 10% in 2014 to 95% this year. Because of the high mobile broadband penetration, Myanmar can now be considered a “digital native” country.
We look forward to welcoming legal infrastructure and national payment standard infrastructure currently being built by the government.
What do you believe is required for Myanmar to progress as a digital-savvy nation and have the right infrastructure for growth?
We see telecommunication infrastructure as the first step towards a digitally-savvy nation.
The government has shown its support for digitisation as part of the Covid-19 Economic Relief Plan, where its fifth goal includes promoting the use of mobile payment services, bank transfers or card payments for e-commerce, and encouraging retail businesses to use e-commerce systems. In fact, the Myanmar government had recently disbursed cash relief to citizens via mobile payment options, in a bid to encourage more citizens to adopt mobile payment solutions.
With a stronger telecommunication infrastructure to support initiatives on this front, we believe that the convenience and other benefits of digital solutions will smoothen the conversion process for Myanmar consumers and businesses.
Next, we will need interoperability between payment platforms and interbank transfer for domestic remittance.
Once we have these in place, we can focus on user acquisition and eventually scaling the business to include international partners to create a vibrant and connected digital economy.
Where do you see the Myanmar fintech industry in the next five years?
The COVID pandemic has actually encouraged the growth of the fintech industry, because people are trying to avoid using cash in their transactions for hygiene purposes.
The pandemic is driving all the players in the fintech industry to push digital payment adoption to their users.
Myanmar government sees it as a viable solution amidst the pandemic, and have been partnering with digital wallets to disburse cash relief to the citizens as well as incorporating features to enable digital tax payments.
I believe that the majority of Myanmar will be using digital payments significantly in the next five years.
What’s next for NearMe?
We are currently increasing the variety of digital services and payments available on the platform*. Thereafter we will extend our B2B solutions to cover partner retail stores and their physical goods suppliers.
Digital services include mobile top-ups, bill payments, repayments and utility payments while digital payments include all cards’ and wallets’ acceptance at our partner retail stores.