One of the routine tasks in moving to another country is setting up a bank account, which we duly did a couple of months ago. Modern banking in Laos is in a fledgling stage; the country runs on cash - groceries, petrol, restaurants, hotel bills, the lot. Banks record everything in vast ledgers and messengers daily hand deliver bags of cash between banks.
About 10 years ago, Vientiane only had 1 ATM. Now there are half a dozen banks and dozens of ATMs. So, an ATM card is an essential part of life in Laos.
This is all well and good except for the small fact that I can never remember my PIN.
When I first receive my PIN, I open the envelope and think "Wow, this one's easy!" Then I commit it to memory and throw away the original, as you're supposed to do. A couple of weeks later, I'll find myself standing at the ATM in dismay, my 'easy' PIN completely erased from my mind. I'll try a couple of versions in hopeful desperation before admitting defeat. Then, I'll tuck my tail between my legs and return to the bank to contritely ask for another.
I'm currently on my 3rd PIN. When I was at the bank yesterday, the lady had to call her supervisor over to check that she wasn't reliving a recent memory (she was), and also to check that I understood the purpose of a PIN. Then we all had a good laugh at what a silly falang I am.
So, while my mind-like-a-sieve situation signals the need for multiple payment options, there is also a more pressing case for it on a national scale.
A national payment system is basically a system of financial transactions that use cash substitutes, like credit or electronic transfers, to bypass the physical exchange of money. At least that's my understanding. It's more efficient, there are fewer transaction costs, and it's less prone to corruption. It also means that small and medium-sized businesses can grow because they can access credit and expand their cash flow.
There are follow on benefits to the population and the development of the country as well. One example is through tourism, an important industry for any developing country.
Nobody feels particularly comfortable carting wads of cash around in a foreign country, especially tourists who may already feel like they have 'CASH COW!' stamped across their foreheads. So, maybe they'll spend less time in Laos, or just avoid rural areas where there are no ATMs. But for Laos, less tourism means less local employment, a factor that particularly affects women. In regional Laos, there are less working opportunities for women; they can't work in the mining or hydropower sectors for example, and there are few in the police or military. Tourism is more the equal opportunity employer.
So, there are a good reasons for a national payment system. The bad part of course is that the start up costs are immensely expensive for the government, hundreds of millions of dollars worth. Also for the banks who have to buy the new technology and invest in training but they are usually behind it.
Hey, Russia did it this year. And Laos is on its way. A draft decree is currently on the table. Maybe there's a credit card PIN in my future too.