Myanmar yesterday launched its first debit cards, giving customers the chance to use plastic for shopping, dining and travel for the first time in the latest leap forward for its cash-dominated economy.
The central bank announced the formation of the Myanmar Payment Union (MPU), in cooperation with 17 banks, which will let customers take out cash from any ATM nationwide and make payments in a small number of shops, restaurants and offices.
“Now we still have a cash society, but we’re heading towards a cashless one,” MPU secretary Ye Min Oo said at the launch in Yangon.
Debit and credit cards have been available for years in most neighboring countries, but the arrival of plastic in Myanmar is a significant step for an economy lumbered with an antiquated banking system after decades of Western sanctions and disastrous fiscal policies under a military regime. Even ATMs were virtually unheard of in Myanmar a year ago, when cash had to be used for almost every transaction.
The military regime gave way in March last year to a quasi-civilian government under Burmese President Thein Sein, who has introduced a series of political and economic reforms.
These have included the introduction of a managed float of the kyat currency in April this year, when a system of multiple exchange rates began to be dismantled.
ATM cards were launched this year, but holders were only able to use the machines of their own bank.
Plans are in place to offer credit cards in coming months after MasterCard Inc reached an agreement with Co-operative Bank Ltd, which has 24 ATMs, to issue the country’s first branded cards.
Foreign banks are still not allowed to offer banking services in Myanmar.
Use of the new debit cards will be restricted at first to 14 places in Yangon, including shopping malls, airline offices, computer shops, one hotel and two restaurants.
Withdrawals from ATMs will be limited to 1 million kyat (US$1,152) per day, the central bank said.