Credit cards are increasingly common in Myanmar, with most of the bigger lenders offering the product. But people in the banking sector say it will take around five years until credit cards are widely used.
Pre-paid cards and debit cards starting appearing in Myanmar almost five years ago. But credit cards, which disappeared in the wake of the 2003 banking crisis, only returned in the middle of last year.
Many lenders now offer various types of credit card with different spending limits. KBZ, AYA Bank and CB Bank, which together account for two-thirds of all assets in the private and semi-government owned banking sector, all offer credit cards.
CB Bank has already issued over 5000 credit cards and over 600,000 debit cards, while AYA bank has issued over 10,000 credit cards and about 500,000 debit cards.
Foreign payment firms like Visa and MasterCard are now allowed to operate independently in Myanmar, and both CB Bank and KBZ have partnered with Visa to offer cards that can be used locally and abroad.
But local credit card holders regularly report difficulties in using their credit cards in supermarkets and shops. Bankers concede that in many retail outlets credit cards are not yet accepted.
"There are only few places that credit cards can be used and it is because few shops have cooperated with the banks," said U Zay Yar Aung, manager of Card and ATM services for CB Bank. "Banks have made huge efforts to make the use of credit cards possible at shops that already accept credit cards. But although we also urge other shops to accept cards, we need the shops to accept the idea."
Even after convincing a business to accept credit cards ? many prefer to trust in hard cash given the banking sector`s historic fragility ? there can be problems with training staff.
"Another factor is that we need to take time for the employees of the shops where credit cards can be used and cardholders to understand the system," said U Zay Yar Aung.
There are more than 7000 business with a point of sale machine that can accept credit cards, most of which are in Yangon. Shoppers in the commercial capital can theoretically buy a slice of pizza or an Apple or Samsung product with their cards. But this is not always the case.
"It should be the case that you can use your credit card widely," said Moh Moh. "But I have had problems using my card in Apple shops, and only a few restaurants accept cards. It`s not convenient to have a credit card given the annual fees."
Most yearly credit card fees range between K35,000 to K40,000 depending on the bank and the service charges.
"Cards are convenient for people who go to foreign countries," said Daw Thinzar from Tarmwe township." But debit cards are more convenient than credit cards for the local people as there are fewer places where you use credit cards or buy on instalment. But if most of the shops accepted credit cards they would become more popular."
U Zay Yar Aung said that although many shops do have the capacity to accept cards, staffing issues present problem.
"There is problem when the trained staff of a shop leaves because knowledge about cards is poor," he said. "The banks have had to educate staff in retail outlets, but new staff [without training] do not dare to accept credit cards when those trained staffs leave."
The solution, he adds, is much more cooperation between banks, businesses and their staff.
Banks are also eager to offer customers the possibility to use credit cards to buy items on installment ? a hugely popular option for many shoppers.
But U Thura Maung, director of AYA Bank`s card department, told The Myanmar Times that each banks` installment lending business and credit card business operates differently. This makes it difficult for retail outlets to publicise the different offers from different banks.
"Eventually the instalment system will be available almost everywhere and whether a customer can take advantage of it will be determined just by checking their balance," he said. "Now, the market [for credit card installment] isn`t developing well and we`re making slow progress."
U Kyaw Lin, chief executive of CB Bank, thinks that as more and more cash transfers become electronic this will also help credit cards will become more popular.
"They will become more convenience when companies link with the banks to transfer salaries into worker`s accounts," he said. "There are many sectors that need to change [to electronic payment]. We have to wait for a while, but it will happen over the next five years."
By Myanmar Times
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