Kanbawza Bank (KBZ), a private commercial bank in Myanmar, rolled out new inbound cross-border remittance services, allowing users in Singapore, Malaysia, and South Korea to transfer money back to Myanmar, through Tranglo, a Malaysia-based cross-border payment firm, according to a Myanmar Times report on Monday.
The new service aims to capture the surging demand in cross-border remittance services from 4.25 million Myanmar migrants living abroad, where only USD 2.8 billion was being transferred through formal remittance channels last year, with around USD 5.2 billion being left out every year, according to the Ministry of Labor, Employment, and Social Security.
The sender could remit money to Myanmar through Tranglo’s counters in Malaysia or its partner branches including GPL, and MaxMoney in Malaysia, SlideSG in Singapore, or GME in South Korea, according to the company. While the maximum transfer amount is the equivalent of USD 5,000 in Myanmar’s currency kyat.
While informal money transfer is widely adopted by Myanmar citizens and offshore migrant workers to send money back home, money transfer organizations such as Western Union and MoneyGram also offer remittance service, but their hefty transaction fees often scare away senders.
Western Union, for example, the maximum transferable amount is USD 5,000 and the minimum is USD 1 per transaction, while the transaction fee runs at USD 3.20 to 292, or 3 to 6% of the transfer. While some informal dealers only collect a transaction fee of up to 2% for outgoing and incoming cross-border transfers, according to Frontier Myanmar.
KBZ claims that receivers in Myanmar do not have to pay any transaction fees, however it did not disclose the transfer fee that Tranglo may charge on the senders. KrASIA attempted to transfer the equivalent amount of USD 5000 in South Korean Won (KRW) through GME Remittance, one of Tranglo’s partners in South Korea, and around KRW 11,000 (USD 9.7) or 0.2% of the transfer was charged as a service fees at the time of publication.
Beneficiaries will be able to receive the money in real-time in their KBZ Bank’s savings accounts, where they are able to withdraw the funds through an ATM or access the money through KBZPay, the mobile wallet under KBZ Bank.
Regional fintech firms like True Money, and 2C2P have rolled out cheaper and easier options, which allow users to transfer money through agents or outlets throughout Thailand while the beneficiaries will receive money in their bank accounts, mobile wallets, or even in cash in Myanmar. AYA Bank, Myanmar’s second largest bank has expanded its collaboration with Thailand’s Siam Commercial Bank to facilitate cross-border remittances.
In an interview with KrASIA in July, Brad Jones, CEO of Myanmar’s leading mobile wallet Wave Money, said that the company had applied for a license for cross-border remittance and was waiting for approval from the Central Bank of Myanmar.
Tranglo, founded in 2008, is a cross-border payment firm that have offices in Kuala Lumpur, Singapore, Jakarta, Dubai and London, while its payment network spans more than 100 countries. The fintech player secured a partnership AliPay and WeChat Pay HK to enable its users to transfer money back to Indonesia and the Philippines. As of September this year, it has processed USD 6.91 billion worldwide, according to the company’s websites.