Burmese high street banks are preparing to offer credit card transactions to facilitate smooth money transfers in time for the 2013 Southeast Asian Games, claim financial experts.
“Foreigners will not need to bring money in a bag. They just need to bring their cards—Visa or MasterCard,” said Zaw Linn Htut, managing director of Kanbawza Bank.
Currently, national banks must register for the right to have an “acquiring” cards system, which allows transactions with foreign credit cards, and an “issuing” cards system, in order to provide domestic customers with their own cards.
“We have to do many steps to reach the level of introducing issuing cards,” said Phey Myint, managing director of the Cooperative Bank. “We have to try to produce debit and credit card systems first. After that we will try for an acquiring card system.
“We want to have not only an acquiring card system for foreigners but also issuing cards for local people.”
The vast majority of countries around the world permit the use of Visa and MasterCard but Burma is lagging behind due to its antiquated financial system and decades of Western economic sanctions. Burma’s Central Bank will be in charge of organizing the arrival of Visa and MasterCard with implementation by local banks through the Myanmar Payment Union.
Observers say the move will provide a huge boost to Burma’s fledgling yet potentially massive tourism industry. Currently foreigners must bring all funds for their visit with them in flawless notes of US or Singapore dollars or euros which are then changed for local kyat at banks or exchange counters.
The slightest crease, smudge or blemish makes foreign currencies unacceptable to official Burmese banks and only possible to exchange at black market lenders at a lower rate. ATMs can be found in big commercial centers but do not accept foreign cards at the present time.
“Kanbawza run ATMs in Yangon, Pyin Oo Lwin, Naypyidaw and Mandalay. In fact, we have to do many steps to develop a financial system. We have to extend ATMs to run at all branches of Kanbawza,” said Zaw Linn Htut.
Burma is currently undergoing economic reform including the establishment of a stock exchange, passing updated investment legislation and the introduction of foreign currency bank accounts.
“Without using credit cards, it will be difficult to do business in Burma. How will we move money quickly?” asked Anthony Nelson, associate director of the US-Asean business council at a press conference on Monday. “It is one of the essential things for a developed business environment.”