Wave Money, a money transfer operator in Myanmar with a nationwide retail reach, is extending its business into billing payments and other services for businesses.
The company boasts a network of over 5,000 telecom outlets and mom-and-pop stores where people can deposit and receive money that it says is five times the number of bank branches in the entire country. Led by CEO Brad Jones, it launched operations in August, 2016, shortly after telcos were permitted by the government to provide money-transfer services.
“We’re going after two markets,” Steve Haley, product manager at the firm’s Yangon office, told DigFin. “We’re going after the base of the pyramid [that is, daily use by retail customers] as well as payments for disbursements for NGOs.”
Nicolas Corlin, the firm’s head of product and digital, said the company is working with foreign enterprises in Myanmar to integrate their payments online.
Many companies have to pay bills or transfer money offline. “Small, individual payments like buying airline tickets are still all in cash,” Corlin said.
The company’s IT teams are now working with corporate teams to access a client’s operations data with Wave Money’s APIs.
Welcome to the revolution
Myanmar is a stark example of how digital technology in emerging markets can create new businesses overnight.
Until 2014, the country had only one mobile operator: the government-owned Mynama Posts and Telecommunications (MPT). The reclusive military government wasn’t interested in people accessing communications, and a SIM card cost more than $1,500. But then the government opened the doors to competition and licensed two foreign telcos, Telenor of Norway and Ooredoo from Qatar.
The cost of a SIM card quickly collapsed to about $1. “People were literally queuing around the corner on day one,” Corlin recalled.
Now, a little more than two years later, Myanmar (population 53 million) has gone from negligible mobile penetration to 90%, nationwide (although some people own multiple SIM cards). Moreover, the population leapfrogged from 2G wireless telephone technology to 4G: 80% of mobiles in the country are smartphones, Corlin says: “We went from nothing to digital revolution.”
Wave Money is a joint venture between Telenor and Yoma Bank, a domestic financial institution founded by Serge Pun, a Burmese who made his fortune in Hong Kong real estate.
It is competing against OK Dollar, another digital money-transfer operator, which is owned by the marketing arm of a conglomerate rather than by a bank or telco.
(And unlike Wave Money, which is regulated by the central bank, OK Dollar does not operate with any kind of license; messages to OK Dollar and its representatives by email and LinkedIn were not returned.)
Wave Money launched as an over-the-counter service in which people could visit an agent, usually at a Telenor outlet, and send money quickly and cheaply to anyone else in the country, with the cash being able to be collected via another agent. Mobile money transfers followed, with Telenor customers first to gain access to the service.
Wave Money is trying to get other telco operators’ customers to join as well, provided they input some basic KYC information, although Corlin said it’s likely that MPT and Ooredoo want to offer mobile payment services of their own.
The company’s hurdle is customer acquisition. “The challenge is to get people to discover and use the app,” Haley said.
On the one hand, an entire mobile market has been created. On the other, it lacks obvious marketing avenues: few can afford Google Play or other gift cards that are ubiquitous in more developed markets. And while most people now have a smartphone, they don’t have email accounts.
That’s why the company has worked to grow an agent network, which this year topped 5,000 locations. Wave Money has acquired 250,000 customers in the last six months, and expects its business to turn cashflow positive within 18 months. The company generates revenue through small fees for taking cash out of the network, as well as by reselling some air time for Telenor.
Yoma Bank backs each kyat transferred in a trust, and reports these daily to the Central Bank of Myanmar. (DigFin is unclear about what kind of custody or reporting requirements exist for OK Dollar, as that company didn’t respond to our queries.)
The move to launch payment products for companies, however, is meant to create new revenue streams. At some point, Wave Money wants to become a broader financial services company. It is unlikely to ever seek a banking license, but it could look for partnerships that expand its product set.
“We have the footprint,” Haley told DigFin. “We can change the game.”