Myanmar’s fintech sector is set to ride a tailwind in 2021, as strong interest from investors, government support, and consumer confidence provide a shot in the arm for the local fintech startups, with the COVID-19 pandemic hastening adoption in a country where cash has long been king.
“Among different fintech verticals, payments have experienced the strongest growth. We have seen the adoption of online payment solutions like never before,” Ye Myat Min, founder and CEO of Nexlabs, a Myanmar-based digital consulting firm told KrASIA.
He added, “Governments are adopting online payment solutions (including wallets) to do G2C [government to consumer] payments. Businesses are adopting similar solutions to accept transactions online. Many consumers also started venturing outside of Facebook to start using more digital services, accelerating online payment adoption.”
Wave Money, one of Myanmar’s leading mobile financial services providers, recorded a spike in the adoption of its mobile payment services. The firm has seen its unique customers rise from 21 million in May last year to 27 million as of September, according to the company.
The firm, which allows users to process financial services like bill payments and local remittances through its mobile wallet application Wave Pay and over-the-counter services, moved a total of MMK 12 trillion (USD 8.7 billion) in 2020, doubling last year’s MMK 6.4 trillion (USD 4.3 billion).
The aggregate capital involved in Wave Money’s transactions is equivalent to more than 11.5% of the country’s estimated 2020 gross national product of USD 75.5 billion, according to a company statement published on January 7.
Interest from regional investors
Regional investors have also set their sights on Myanmar’s fintech market where only 20% of the country’s 55 million population are banked. In May, Chinese fintech giant Ant Group invested USD 73.5 million in Wave Money.
“Ant Group’s investment into Wave Money was the most notable one in 2020, it is a testament for the potential of fintech in an emerging market like Myanmar. This has put Myanmar onto the radar of other serious global or regional fintech investors and players,” said Ye Myat Min.
Shortly after the investment, NearMe, a local fintech firm that allows users to make various types of payments through its mobile app and point-of-sale terminals, scored a seven-digit investment from Japanese conglomerate Sumitomo Corporation in September.
The investment will help the firm expand its retail merchant network, and to accelerate the adoption of digital payments. “We are thankful that we were able to capitalize on the trend to go digital and have achieved a 65% growth year-on-year in revenue amidst the pandemic,” NearMe CEO Lynn Htaik Aung, who is also director of alternative payments at 2C2P, a leading payment services provider in Southeast Asia, told KrASIA.
Sanguine outlook
While other bank-led fintech players have also jumped into the fray, including KBZPay, CB Pay, AYA Pay, and OnePay, Lynn remains sanguine on the country’s fintech scene.
“Mobile and digital payments are surging with the push from COVID-19. Currently, the mobile penetration rate is over 95%. This provides plenty of opportunities for the fintech industry to grow in Myanmar,” said Lynn. “The adoption of digital payments will continue to accelerate and NearMe is leading this transition by providing offline payment solutions (smart point-of-sale terminals) to its partner stores, including Myanmar’s largest retail chain, G&G convenience stores,” he added.
“In 2021, I believe that there will be a continued push for integrated payments. The rollout of the Myanmar Financial Network System and real-time retail payments by the Central Bank is a step in that direction. By the end of 2021, I hope that we will see full coverage on these integrated payment networks where consumers can make payments in any direction to anyone using any bank account or wallet. This will open opportunities for fintech players and banks to innovate more in 2022,” said Ye Myat Min.
“I believe that openness and integration will be the pathway forward so that consumers will have more choices and get the best of both worlds,” he emphasized.