Business Article

Development of Digital Economy in Myanmar (3)

Digital Economy and Online Payment

February 4, 2021

Cash payment has been widely used for a long time and it is very convenient in paying between the customers and businesses while they are together at the same place and the payment is small. But it has limitations. While these people are at different places, or large amount of payment, there will be inconveniences in keeping a lot of money and problems of transferring money from place to place. Moreover, especially, in the time of COVID-19 pandemic, cash payment is quite dangerous as the virus can spread through the cash. So, in order to overcome these inconveniences, it is needed to use digital payment than cash based transaction.

Concerning next new normal lifestyle, it is believed that there will be many competitions in information technology field so that digital economy will widely take place in the future. In transforming into digital economy, one of the most important things is changing into online payment. There are different types of payment like payment between individuals, payment between businesses and people, payment among the businesses, payment between government and businesses; payment between government and public, etc., The next thing is about transferring the possessions according to the sharing economy. In this case, online payment is the most effective way as payments are done easily from different places.

For businesses, they begin to use Information and Communication Technology (ICT) in their core business processes. Schools begin to teach from online and shops also sell their products online. In this case, services should be provided without any regional limitations. At that time, online payment is needed. Moreover, in the time of pandemic, online payment has a lot of benefits. It can save time, cost effective and safety.

Online Banking and Digital Payment in Myanmar

Myanmar has been using 11 million automated teller machines (ATM) cards which are linked with the bank account since 2012. Then there is point of sale machine (POS) which these cards can be used in shopping. There are also gateway for shopping from e-commerce. Moreover, there are internet banking and mobile banking which can be used by linking with the bank account since 2013. On the other hand, for those who don’t have a bank account, mobile money or mobile wallet is available when telecommunication sector has been developed since 2015. Later, they are called mobile pay. Numbers of people using the digital payments have been increased years to years.

After the COVID first wave, it is noticed that digital payment is mostly used in paying bills to government especially the meter bills. People pay for their bills from mobile banking, internet banking and mobile pay. In November 2020, Ministry of Commerce permits the applications of export and import via online and the payment also can be done online. The government also actively participates in transforming into online payment. The other prominent changes are having one stop service from online in registering the new company and extension of the companies’ registrations on DICA.

COVID-19 is not only a big challenge for our community but also a good chance in transforming into digital economy.  People do businesses from online and payments via online. Schools offer online classes with online payment. Moreover, there are health care and consultant services online with online payment. It can be seen that transforming into digital economy happens very fast after the second wave of COVID-19 in Myanmar.

Transforming into Digital Payment

In order to transform into digital economy, it is needed to educate all people about the pros and cons of online payment. People need to know that the passwords of the bank accounts must not tell anyone, how does online payment work, how to use internet effectively, and also about cyber security. On the other hand, the government has plans to engage online payment. According to the MERRP plan, government will use online payment in providing supply to the households and giving pension fees.

The main points of transforming into online payment include being convenient, secure and easy to use. Apart from the ATM, mobile banking and mobile pay, the Central Bank of Myanmar is planning to provide the QR code system in payment as in international. This system is currently termed as MMQR. In MMQR system, only one application is needed to scan the code and payment can be done even from different pays. The government should also offer tax incentives, for example, in the cash payment, there will be 5 percent of commercial tax, but if people use online payment, the percentage of commercial tax will be reduced. Myanmar needs to improve numbers of bank account holders which is currently 26% of adult population and the figure is far below than other countries.

All in all, it can be said that online payment is beneficial to government sector, public sector and economy sector. Indeed, digital payment is more secured than cash payment as there are many security steps in online payment system. So, all we have to do is to use and follow up the changing digital economy and online payment systems occurring in new normal life bravely. [1]



[1] Myanmar Alin Newspaper (3.12.2020) Discussion on Digital Economy