Banking the Unbanked: KBZPay and Financial Inclusion

Banking the Unbanked: KBZPay and Financial Inclusion

by November 3, 2023

Forecasting the necessity of payments in tech enabled economies, JP Morgan’s Global Head of Payments Takis Georgakopoulos believes that “payments are eating the world, and anybody who doesn’t recognize that and adapt will not survive”. In KBZ Bank’s quest for adaptation and innovation, KBZPay is at the cutting edge of payment processing: it is an entirely free, real time, instant payment rail with a distributed ledger and capacity to complete 18,000 transactions per second.

For a country of 55 million people, Myanmar is not often thought of as a regional Fintech pioneer. Yet its population, their access to technology, and the sizeable informal economy are some of the factors that have led to the quick growth of mobile money and mobile wallets. The best example of this is KBZPay, a next generation current account platform that has established itself as the dominant player in the market and has played a crucial role in enabling commerce and driving financial inclusion. Accessible financial services like KBZPay will continue to be critically important to Myanmar’s population—especially its low-income citizens—as the country navigates through the current period of political change.

Launched and powered by KBZ Bank, the App has seen exponential growth since its launch. By the end of 2022, the monthly transaction value was $3.4 billion with 80% of transactions less than $5. In its first four years, the KBZPay App registered 10X growth in its customer base and saw the onboarding of 280,000 Agents and merchants as of December 2022, up from 10,000 when it was first piloted in mid-2018.

The use case of mobile money in Myanmar is self-evident in a country with 90% of the population owning a smartphone, against 30% of the population having access to a bank account. As a result, KBZPay is astoundingly popular, with over 12 million downloads, which accounts for approximately 1/3 of the total adult population in Myanmar. Its digital impact is equally impressive, with total payment value being $40 billion USD/62% of Myanmar’s GDP. As a point of comparison, this contribution to Myanmar’s GDP is a resounding 12 times higher than what Kakao Pay brings to South Korea’s GDP.

Finally, KBZPay capitalizes on the unmet demand for end-to-end payment solutions. Ordinarily, the Fintechs that enjoy ubiquity such as Wise (formerly TransferWise), WorldRemit, and Stripe established their market dominance through first mover-advantage. For KBZPay, the opposite is true. Entering the market at a time when there were multiple mobile wallet offerings, it is KBZPay’s last mover advantage that sets it apart. Having learned from the limitations of existing mobile wallets, KBZPay was the first to create a digital product offering on a current account basis.


source: KBZPay Facebook

KBZ Bank’s Role in KBZ Pay’s Success

The dominance of KBZPay in Myanmar has been rooted in the success of KBZ Bank. Founded in 1994 and becoming the largest privately owned bank in the country, KBZ Bank has a market share of 40% of retail and commercial banking in the country, making the expansion to mobile money in 2018 obvious.

Building on an established brand and the trust of consumers, KBZPay’s competitive market advantage is the result of leveraging pre-existing bank infrastructure as the foundation of its agent network. In traditionally cash-based economies, barriers to customer adoption of mobile money can include a lack of information or awareness, low digital literacy skills, and geographical separation from infrastructure to deposit or withdraw cash.

Agents and agent networks therefore play a critical role in consumer responsiveness and retention. They become key contact points between consumers and digital finance providers; they can onboard customers and educate consumers on how to use their mobile wallets.

This has been crucial in Myanmar, which is a sizeable country of 676,578 km². KBZ Bank has high coverage, across rural and urban areas, with over 500 branches which employ 18,000 staff. Though KBZPay now has 56,400 KBZ Agents overall, its successful market entry was facilitated by mobilizing KBZ Bank’s staff to roll-out the App. They continue to play an important role in teaching potential users about financial literacy and in growing the customer base by encouraging more people to sign up to the App.

Another unique feature of KBZPay is its cyber security mechanisms. As part of KBZ Bank’s Anti-Money Laundering and Counter-Terrorism Financing program, KBZ Bank has implemented rigorous KYC measures with the Oracle Financial Services Analytical Applications (OFSAA), which is considered the most advanced AML Software available globally.

Super-App Functionality and Business Growth

The KBZPay App is powered by a technology stack that gives users access to numerous services in one place. In addition to instant P2P payments, users can pay utility bills and top up their phones. The app also hosts KBZPay Market, an e-commerce platform, which gives users access to high-end home appliances, electronics, and beauty products among other offerings from international brands. Through KBZPay Shopper Loans, customers can also obtain rapid financing for sizeable purchases by applying through KBZPay for a loan. The decision-making is automated, harnessing machine learning to assess the creditworthiness of an applicant, with a decision being made in 24 hours.

KBZ Pay bill payment

source: KBZPay Facebook

As a Super-App with a dynamic Mini-App ecosystem, KBZPay also provides scalable B2C solutions for businesses, creating a seamless experience for users and merchants alike. These Mini-Apps include businesses offering lifestyle products, such as travel companies where users can purchase and pay for tickets through the centralised payment gateway offered by KBZPay. Through the API, businesses can deal with large volumes of sales, relying on KBZPay’s back-end to complete and reconcile transactions. This has an impact on the productivity and growth of businesses; they can rely on KBZPay to provide a stable, reliable, and quick payment solution, with no downtime. At present, the App hosts 10 mini-Apps through its interface, with plans to include 50 more by the end of 2023.

For merchants that are SMEs, KBZPay lowers operational costs through the KBZPay Partner App. Through the Partner App, businesses can digitise payroll, and instantly disburse payments to employees’ KBZPay wallets. Providing tech-enabled administration for SMEs enables them to streamline their processes and boost their productivity, demonstrating the resulting impact that KBZPay has on economic activity in Myanmar.

As a result, consumers have KBZPay as their everyday partner, helping them manage their finances and connect with digital services in a secure and mobile way, while entrepreneurs have KBZPay as a platform to reach millions of customers, enabling their business to scale.

Unexpected Success

In current market conditions, and what the 2023 McKinsey Global Payments Report calls the “cusp of a new payments era” payment service providers are deepening their penetration into segments of the market that have been underserved. Such areas in the payments value chain include low-value and high-volume cross-border payments and SME payments. These segments enable Fintechs, banks and payments platforms to optimise their net interest margins.

KBZPay is no exception: SME use of the app has driven profitability through the sizeable float that businesses bring into the banking system. While the Super App was launched with a separate offering for SMEs (the Red Partner App), in leveraging cluster analysis and unsupervised learning, the KBZPay analytics team realised that thousands of businesses were using the consumer Blue App.

There are 160,000 businesses confirmed on the Blue App, while KBZPay estimates that another 750,000 businesses use the consumer version of the App. These 910,000 businesses are driving more than half the transaction value and generating more than half of the total float on KBZPay. This was an unexpected success, as KBZPay initially set out to onboard businesses on the Red Partner App while onboarding business owners on the Blue App for their personal accounts. Yet, the user-friendly interface of the Blue App was well suited to the needs of businesses and lowered SME customer acquisition costs for KBZPay.

Businesses then have access to instant-real time B2C and B2B payments. KBZPay enables businesses to streamline transactions and their own accounting. They can transact business through a distributed ledger, powered by a digital web of self-validating transactions. SMEs can process more transactions, and sort them, where transactions with QR codes and a note functionality are a digital handshake. Through frictionless payments, KBZPay is providing businesses with liquidity, driving efficiency gains through reducing payment costs and transforming the economy. The key to any bank or payment service constituting a significant part of GDP is through high business use and product stickiness. KBZPay exemplifies this, and is on par with India’s UPI, processing around 65% of GDP, metrics which are entirely unmatched by Fintechs in any developed markets.


In 2023, the estimated global value of remittances was $840 billion, comprising a significant portion of the GDP of various economies, and the largest source of foreign income for many developing countries. Though remittances in financial services have been the preserve of traditional banks and transfer services such as Western Union, the industry is experiencing rapid change and disruption by Fintechs.

Where KBZ Bank and KBZPay link innovation in banking and digital payments, they are also spearheading innovation in remittances in Myanmar. Foreign remittances are often lifelines for families, helping those employed in other countries to contribute financially to those who remain back home. These cross-border payments have traditionally been costly, with legacy remittance providers charging high transaction and intermediary fees, coupled with prohibitive exchange rate margins and FX spreads. However, Fintechs and payment platforms such as KBZPay are lowering transaction costs, through competitive exchange rates, transparency on fees, faster payment processing, all while charging minimal fees, or no fees at all.

KBZPay enables swift processing of remittance payments from workers across the Burmese diaspora in countries such as Thailand, Singapore, Malaysia and South Korea. In Thailand, where there are 4 million Myanmar migrant workers, the total value of their worker remittances is between $4.8 billion dollars to $6.2 billion dollars, and it is estimated that these workers send up to 50% of wages back home. Not only is it free to transfer remittances using KBZPay, but it also provides currency interoperability, as well as the option to transact kyat-kyat payments across the border.

Empowering Myanmar’s Youth and Women

The uptake of KBZPay has been unsurprisingly swift; as of June 2023, the KBZPay App has been downloaded 12.4 million times, of which 8.2 million users have completed full biometric KYC verification.

Within those figures, 4.3 million teenagers and youth have downloaded KBZPay App, making it transformative in driving financial inclusion for youth who may be otherwise excluded by traditional banking, through stringent requirements or the lack of tech-enabled services. With unmatched convenience and an intuitive interface, unbanked youth can quickly carry out transfers, save money, pay for goods and services (including university fees), and gain financial literacy at the touch of their fingertips and wherever they are in the country.

In many developing economies, high percentages of women are excluded from financial services and from participation in formal economies for a range of reasons. These include lower levels of overall financial and digital literacy, disparities in educational opportunities, cultural and societal norms and a lack of identification or collateral required to access financial products. Significantly, amongst middle-aged customers of KBZPay, the number of women using the App outnumbers men. KBZPay is clearly making important strides to close the gender gap in access to financial services. KBZPay continues to underpin financial inclusion for women entrepreneurs; 52% of the businesses that use KBZPay of merchants or Agents are run by women. They are now able to store and save money, reinvest in their businesses, and grow from strength to strength.

Social Impact

The impact KBZPay has on the everyday lives of people in Myanmar is not to be understated. Through the KBZPay App, users can quickly pay hospital bills and buy medication as well as manage their savings for ongoing health costs. This in turn widens access to healthcare and makes the provision of healthcare more efficient for medical providers, who can lower their administrative costs by digitizing payment information. Since its creation, KBZPay has carried out 503,540 healthcare-related transactions, with a combined value of 137 billion MMK, or $65 million.

The story is the same for education in Myanmar. Since 2018, KBZPay has facilitated 589,967 transactions with a combined value of 134 Billion MMK, or $64 Million. For students, and those paying fees, KBZPay’s payment solutions make the process seamless. For administrators of education, the payment process becomes efficient and paperless, reducing the administrative burden and operational overheads of managing manual payments and permitting the reallocation of time to other tasks.

Furthermore, during the Covid-19 pandemic, at a time where public health messaging from the World Health Organization encouraged cashless transactions as an important intervention to slow the spread of the virus, KBZPay was critical for business continuity, bolstering the resilience of the Burmese people during the pandemic and enabling them to navigate this period of disruption and uncertainty.

Through harnessing fintech to promote financial inclusion, countries such as Myanmar and apps such as KBZPay can achieve sustainable development across healthcare, education, and gender equity, while realizing returns and economic growth.


At KBZPay there is no shortage of ambition; by 2030, they aim to grow and serve a customer base of 30 million people and fulfil a bigger dream of achieving 100% financial inclusion in Myanmar. Innovation in the case of KBZPay has clearly improved the lives of individuals and business owners by giving them access to financial services, and yet there are still millions more to be empowered and included in an increasingly digital economy and country.