3 Informal systems are generally based on trust and personal relationships, leaving customers with few options for remedy if complications arise during the remittance process. Use of ICTs (both online banking and mobile money) provides an opportunity for increased transparency and accountability for both parties involved in the transaction. Use of ICTs can also improve the speed, reliability, and convenience of sending money domestically and internationally. Furthermore, the enhanced connectivity of the country now means that Myanmar banks can offer online banking services and international remittances or payments. There are currently four banks 156 permitted by the Central Bank of Myanmar to provide formal remittance transfer from Malaysia, Singapore, and Thailand through partner banks. Fees for remittance services may be flat rate or variable rate, depending on the bank’s partner agreements and the total amount of money being sent. However, usage of formal money transfer systems is limited for a variety of reasons. For some, proximity to bank or money transfer branches is problematic. In many rural communities, bank or transfer branches do not exist. In the event that branches are nearby, many are reluctant to use formal services due to a broader distrust of Myanmar’s banking system. Required paperwork is also problematic for migrants, some of whom do not have national registration cards, work permits, or passports. Alternative money transfer services such as Western Union, Money Gram, and Xpress Money are also now available in Myanmar due in part to increased connectivity, but often include higher transaction fees than using the hundie system. Mobile Banking and Mobile Money Distrust of the formal banking system is rooted in historic experiences such as demonetisations of Myanmar’s currency in the 1980s and the 2003 bank runs. MDRICESD has estimated that formal banking penetration is only around 10% in urban areas and “considerably lower in rural areas”. 157 Sending money in Myanmar can be timeintensive and unreliable for both banked and unbanked individuals. If an individual does not use a bank account, transferring in money may require someone to hand carry or ship the money on a bus to its intended destination. ‘Carrying costs’ are often deducted along the way by couriers, resulting in short payments or receipt disputes. As mobile penetration continues to increase in the country, there is an opportunity for a variety of new financial services that utilise mobile technology. Online banking (sometimes differentiated as ‘mobile’ or ‘Internet’ banking) typically refers to customers accessing formal banking services through a mobile or desktop device connected to the Internet. For mobiles, a bank-specific smartphone application is typical, whereas desktop access is typically through a bank’s website. In Myanmar, a variety of banks currently offer online banking services which allow customers to view their account balances, send money to fellow customers, check exchange rates, and find ATM locations nearby. In order to use 156 157 Asia Green Development (AGD), AYA, KBZ and CB Banks See, MDRI-CESD, “Cash In Context: Uncovering Financial Services in Myanmar” (2015), pg 15. 100 PAGE CHAPTER 3: SECTOR-LEVEL IMPACTS