Business owners in Mon State report a decline in the use of KBZ Pay for commercial transactions following a surge in fraud cases involving the digital payment platform. Small and medium-sized enterprises (SMEs) and money transfer operators have been particularly affected, with increasing reports of unauthorized withdrawals from KBZ Pay accounts.
In recent weeks, well-known celebrities and business owners in Mon State have fallen victim to such fraud. One notable case involved a KBZ Pay user from Ngantay Ward, Mawlamyine, who lost over 40 million kyats on February 15 due to unauthorized transfers to another account.
As a result, many SME operators who previously relied on private banks for financial transactions have begun switching to government-run **Special Accounts**, which they consider more secure.
“The main issue is both financial losses and lack of trust. With Special Accounts, fraud is nearly impossible because transactions are recorded in bank passbooks. In contrast, KBZ Pay is app-based, with no physical records. With Special Accounts, incoming funds are immediately recorded in the passbook, making verification easier and preventing unauthorized withdrawals,” explained an SME owner.
Money transfer operators still using KBZ Pay say they now avoid keeping large sums in their accounts due to security concerns.
“We don’t store large amounts in our KBZ Pay accounts. If we receive 10 million kyats, for example, we immediately transfer it to a bank passbook. KBZ Pay allows transfers to bank accounts, so we only leave small amounts for essential transactions like phone bill payments,” said one money transfer operator.
Reports indicate that fraudsters primarily target users with high account balances, elderly individuals, and those with limited digital literacy. Scammers use social media platforms like Facebook and Viber or send deceptive SMS messages to gain access to victims’ funds.
Many victims who reported their losses to KBZ Pay centers received no response, and most have not recovered their stolen funds.
The Central Bank, under the military junta, previously announced an investigation into fraudulent withdrawals from KBZ Pay accounts. On December 3, 2024, it stated that it had begun reimbursing funds to 31 affected users.
