TrueMoney, the Thai Fintech company, is to enter the market for mobile money in Myanmar, adding the country to an impressive cross-border network that includes Thailand, Cambodia, Vietnam, the Philippines, Indonesia and Malaysia.
TrueMoney allows its users to deposit cash in mobile accounts or at point of sale outlets and transfer cash via a network of agents either domestically or overseas.
The service enables Myanmar workers in Thailand to send money home to their families within the hour, and involves partnerships with 7-Eleven and True Coffee outlets in the country.
At the present time around $2m is transferred between Thailand and Myanmar every day, but 80% of Myanmar’s population does not have a bank account, making transferring overseas problematic.
Fintech firms are increasingly focusing on solving this problem by bypassing the banks altogether and substituting formal bank accounts for mobile money e-wallets that users can pay straight into. TrueMoney’s Managing Director for Myanmar commented that the company:
“are targeting the four million or so Myanmar workers based in Thailand who need to transfer money back home but who don’t have local bank accounts”
“With mobile money services there is no need to set up a bank account. This service is for the unbanked who want to improve their quality of life.”
TrueMoney are developing a customised app for use in Myanmar, that will allow people to manage all of their financial affairs from their mobile phones, and in the longer run apply for more sophisticated financial products and services such as loans and financing.
The company says that this is what makes them different, but there is plenty of competition in the marketplace too.
According to an article in the Myanmar Times, TrueMoney operates under one of two contrasting licenses; AGD Bank’s Mobile Banking License, which allows them to operate under a traditional banking license, alongside other companies such as Myanmar Mobile Money, myKat and Ongo Mobile Money, which is part owned by the Bank of Canada.
Other services such as Ooredoo, the mobile and now fintech network from Qatar, Telenor group, who launched Wave Money last year, which has already been used by 250,000 people, and local operation OK Dollar, with 100,000 users, operate under the Mobile Financial Services licenses granted by the Central Bank of Myanmar, which puts a smaller limit on the size of transactions which can be sent.
TrueMoney benefits from strong financial backing; owned by Thailand listed Communications giant True Corporation part owned by China Mobile, TrueMoney operates under a private subsidiary known as Ascend Group, where True Corporation recently placed all of its online businesses.
TrueMoney believes the company can serve businesses in Myanmar by providing funding and a platform to make bill payment easier, as well as a country specific app.
All across South East Asia fintech firms are waking up to the “unbanked” sections of society; those who have never used a formal bank account but still have to transfer sums of money to relatives overseas, and domestically for business or personal reasons.
This means targeting a less wealthy section of society – fintech firms are struggling to persuade more high net worth clients to move away from using traditional banks to handle their investments and financial needs – but are having greater success meeting the needs of the unbanked.
Ascend money has taken in investment from Ant Financial, the subsidiary of Alibaba and one of the biggest players in Asian Fintech, and also uses its technology to create the digital wallets and ensure that they are accepted in all of the different places the business operates in.
TrueMoney has estimated that it uses as many as 50,000 agents for its 30 million users, and has processed nearly $3 billion in the year to date.
Typically, once e-commerce firms, like Alibaba, become established forces, they then look at providing finance solutions seamlessly to their customer, hence their strong investment into fintech firms, who are a preferable alternative to partnering with a bank for financial services.
This in turn can spill over into more products gaining commercial appeal, such as insur-tech, IoT, and peer-to-peer payments.
By partnering with e-commerce fintech firms can reach a much wider audience and tempt customers into adopting the service by offering free goods and services to begin with before encouraging customers to add more of their savings into the platform.
So whilst most banks fear e-commerce giants and social networks as a threat to their market dominance the most, many are also wary of disruptive fintech firms offering digital services, especially in the fields of money transfer.
Banks know they have to spend on fintech style services, meaning fintech payments providers and e-wallet developers could be the perfect link with which to connect ecommerce and financing with unbanked customers not used to these kinds of services.
The question remains which continent will advance the furthest, quickest.