Southeast Asian payment service provider 2C2P has been among one of five firms that recently secured cross-border remittance licenses from the Central Bank of Myanmar (CBM) and is set to roll out inbound and outbound money transfer services in Myanmar “within the next three months,” 2C2P’s head of Myanmar operations Pyay Nyein told KrASIA.
While 2C2P has already received a cross-border remittance license from the Central Bank of Thailand in August last year, this new license in Myanmar will foster the money transfer between the two countries. “The first corridor we will serve is cross-border remittance between Myanmar and Thailand,” said Pyay Nyein.
The new license is expected to benefit Burmese migrants in Thailand, which are the source of 68% of informal remittances to Myanmar. Their legal status in Thailand, the language barrier, and lack of convenience for the recipients have deterred them so far from using formal channels.
Pyay Nyein added that cost and user experience are the two important factors for digital remittances to gain greater adoption in Myanmar, where only USD 2.8 billion has been transferred through formal channels last year, while USD 5.2 billion went through unofficial routes, according to data from the Ministry of Labor, Employment, and Social Security.
“In order to compete with the rampant illegal money transfer business, we recognize the need to offer competitive fees that will attract customers,” he said. “Another key factor is user experience, which should be a streamlined and frictionless process.” Pyay Nyein emphasized that they will need to educate customers about the danger of illegal money transfers and money laundering with the help of the authorities.
Using existing infrastructure
2C2P will use its digital payment arm NearMe, which raised seven-figure funding from Japanese conglomerate Sumitomo Corp in September, and deploy the license through its “existing payments IT infrastructure, mobile wallets, and cash agents.”
Top Shine Money Changer & Gold Trading, OK Money, Wakhema Money Changer, and Ok Zune also received approval from the CBM. The firms are allowed to handle both inbound and outbound money transfers for individual users that are currently living in the country or abroad.
The news comes three weeks after KBZ Bank launched inbound cross-border transfer services in November, enabling users in Singapore, Malaysia, and South Korea to transfer money back to Myanmar through Tranglo, a Malaysia-based cross-border payment firm.
U Soe Min, vice governor of the Central Bank told Myanmar Times that the bank plans to issue more licenses to companies that meet the requirements, and more fintech players are expected to join the fray.