RANGOON — Burma’s sole domestic provider of card-based payments, Myanmar Payment Union, has formed a public company comprised of its 23 member banks, according to the organization’s chief executive officer Zaw Lin Htut.
Myanmar Payment Union (MPU) had planned to form a public company in 2014 and Burma’s Directorate of Investment and Companies Administration gave approval in mid-July, Zaw Lin Htut said.
Mya Than of Myanmar Oriental Bank is chairman of the new company and Than Win Swe of United Amara Bank, owned by the son of recently deceased ruling party lawmaker Aung Thaung, is secretary. Twenty-one directors currently sit on the board.
“We will not be selling shares right now, but we plan to, [pending] agreement by the board of directors. We are interested because the stock market in Burma will operate soon,” Zaw Lin Htut said.
The first Yangon Stock Exchange, which is being developed by the Central Bank of Myanmar and two Japanese partners, is scheduled to open in the first week of December, following the country’s November general election. More than 50 public companies have initially applied to be listed.
After decades of economic mismanagement under the former military regime, the MPU was founded in 2011, under the Central Bank of Myanmar, to establish the country’s first local ATM card system.
Its membership includes 23 local banks, three of which are state-owned (the Myanmar Economic Bank, the Myanmar Foreign Trade Bank and the Myanmar Investment and Commercial Bank). Two others are military-backed—Inwa Bank and Myawaddy Bank.
Each bank was required to invest 200 million kyat upon entering the organization.
“As part of our business plan, we’ll try to develop the country’s payment sector by expanding investment and technology, as well as working with other international payment unions,” Zaw Lin Htut said.
From late 2012, MPU has signed cooperation agreements with China’s UnionPay International, the Japan Credit Bureau, MasterCard and Visa.
Although the organization currently has around 1.2 million card users around the country, its services have been plagued by technical difficulties.
“Some users have complained about card errors, so we know that MPU cards can’t provide 100 percent service, but we will continue to try our best. We will try to raise user awareness too,” Zaw Lin Htut said.
Thet Ko Ko Myo, deputy general manager of Kanbawza (KBZ) Bank, a member bank of the MPU, said as a public company, MPU could play a key role on the stock exchange soon.
“With the stock exchange in Burma soon to be launched, with increased public awareness, it will develop fast,” he said.
He added however that banks in Burma still lacked the infrastructure to develop card based payment systems, citing the technical difficulties encountered under the MPU system.
Earlier this year, MPU announced that local cardholders would be able to make online purchases after companies enrolled with one of the firm’s then 20 local banking partners.
MPU cards can be used to make purchases at three branches of the country’s biggest retail chain City Mart. The organization expects all branches to be covered by the end of the year.