Rangoon (Mizzima) – Burmese consumers will be able to use a Myanmar Payment Union (MPU) debit card in September to withdraw money at ATM machines of participating banks and to buy goods at some stores.
Severa banks are already using the debit cards on a trial-run basis, but the cards have not been widely available to consumers, said spokesperson Ye Min Oo.
The Myanmar Payment Union allows ATM card holders to use any machine, regardless of the bank, to withdraw money or pay for shopping at participating institutions.
Users can deposit money at MPU-member banks, and they can withdraw from 10,000 (US$ 11.44) to 5 million kyat ($5,717) per day.
Currently, sixteen banks participate in the MPU program, and later all private banks will participate in MPU, according to Pe Myint, an official at the Co-operative Bank Ltd. Burma now has 19 privately owned banks.
The move to a debit card system is one of many innovations rippling through Burma’s financial system.
Private banks began installing automated teller machines in the past few months, a major innovation in what has been a cash-based society for decades.
The central bank is preparing to launch a nationwide ATM network and has held talks with Visa International's Plus and MasterCard International's Cirrus to introduce international banking within six months to a year, officials said recently.
Burma’s banking system is has been plagued by decades of financial isolation, imposed by western sanctions and disastrous socialist policies.
Moving funds abroad is often done though a private “hawala” underground money-transfer agents.
“Our payment system is still quite simple. It's mostly based on cash,” Maung Maung Win, one of two Central Bank of Myanmar deputy governors, told Reuters news agency last month. “Even some of the big companies or our government departments like to use cash.”
The new MPU debit card rollout will be followed by a second phase of international services by the middle of next year, or possibly as soon as six months, he said.
He said the central bank wanted to connect to the international network ahead of the 2013 Southeast Asian Games, due to open late next year in Burma's capital, Naypyitaw.
In the meantime, domestic banks are trying to establish a foothold in the new, emerging economy.
Irrawaddy Bank, owned by local tycoon Zaw Zaw's Max Myanmar conglomerate, is less than two years old, but it has announced that it plans to double in size to 45 branches next year from about 20 branches.