Myanmar's Cashless Future Hinges on Digital Security

Chong Ho Yoon, Head of KBZPay and Unsecured Consumer Lending for KBZ Bank.

As one of the final frontier markets in the world, Myanmar is transitioning from an era where banking was once for the elite, to now, where banking needs to be accessible to everyone.

The banking sector, however, is not yet fit for purpose or for growth. Myanmar is still a cash-based society, where up to 99% of all financial transactions in the country are done via cash. Access to and awareness of financial and digital services remains limited, with almost 4 in 5 people in Myanmar (80%) not owning a bank account.

With the introduction of mobile wallets, this is all beginning to change.

Across Myanmar, people from all walks of life are now using phones to manage their finances. Mobile wallets have heralded a new era in the development of Myanmar’s digital economy.

Progress in this regard is clear as the uptake of mobile financial services in Myanmar snowballs. Since launching in 2018, KBZPay, the country’s leading mobile wallet, has facilitated more than US$5.9b in transactions.

Growth shows no signs of slowing with transactions between 1 January and mid-August of this year reaching US$3.6b, an increase of 75% on the total transfer volume seen in all of 2019. This progress was in part due to the COVID-19 lockdown and stay-at-home measures but also reflects broader industry growth and lifestyle trends.

Since April, the free, instant, 24/7 money transfers between registered KBZPay users rose 87% in transaction volume and 162 percent in transaction value. These results indicate that using a mobile phone to perform financial transactions is becoming second nature to many in Myanmar.

An unfortunate side-effect of this progress is a rising number of cybercriminals targeting mobile wallet apps, with identity fraud and password theft becoming more frequent both in Myanmar and internationally. These risks threaten to derail the growth and adoption of mobile wallets and other digital financial services in the country.

So, are mobile wallets really safe? The good news is that due to the lower likelihood of them being lost or stolen, mobile wallets are generally more secure than physical wallets. And, with the advancements that KBZ Bank and other players in fintech are helping to drive, mobile wallets in Myanmar are only going to become even safer.

Since launching in 2018, the financial security of our six million users has always been our highest priority. We have worked hard to combat the threat of scammers and fraudsters and have introduced many industry-first safety features.

Ours is the first mobile wallet app in Myanmar to use facial recognition as a part of the customer onboarding process. It also is the only mobile wallet in Myanmar to display the name of the person set to receive a transfer when a phone number is entered. This added layer of security ensures that money goes to the right person.

A PIN protects all accounts and users can track transactions in the app. On top of this, a unique, one-time password must be generated before a user logs in on a new device.

Our safety practices extend to the 290,000 KBZPay agents and merchants across the country. All merchants must go through our rigorous onboarding process, and users can check the name of the merchant they are sending money to using the in-app QR code reader. This feature ensures a payment is going to the right place.

True financial inclusion can only come through digital literacy, a key element of which is an understanding of cybersecurity. With that in mind, we are working hard to educate our customers on how to keep themselves and their money safe in the digital economy.

This is in-line with KBZ Bank’s broader commitment to keeping people and their finances safe both online and off, through the COVID-19 pandemic and beyond. Our 18,000 staff on the ground engage with thousands of customers weekly to guide them on tips for using KBZPay safely and protecting their finances.

The importance of good “digital hygiene” is enforced through the KBZPay tutorials that are continuously being shared on social media and can be viewed in the new app version – KBZPay 3.0.

The work of protecting our customers will never end, and KBZPay is committed to staying on the leading edge of the industry when it comes to our safety standards. We do not underestimate the role that financial security will play in making full financial inclusion in Myanmar a reality and are confident that our efforts and investments in this area will pay off well into the future .

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