Cash No Cash

The switch to a cashless economy is gaining momentum in Cambodia, and with the government yet to catch up and properly regulate the sector, entrepreneurs themselves are ensuring it is up to international standard.

As Cambodia’s economy develops, with financial institutions continuing to have an everyday presence across the Kingdom, digital entrepreneurs, banks and the service sector are clamouring to push for the inevitable switch to cashless-based transactions and e-wallets.

Bolstered by a robust and competitive telecommunications sector that has spread affordable data access to virtually all corners of Cambodia, and the desire for everyday consumers to have the latest smartphone, the infrastructure has already been laid for the rapid adoption of fintech solutions, according to Tomas Pokorny, CEO of Pi Pay, a local third-party online payment platform that is fully dedicated to cashless payments.

Cambodia can leapfrog other countries by observing and learning from their experiences.

“What we believe is that Cambodia is actually not lacking much when it comes to new technologies and digitisation,” he said. “Sure, we are no China, but with affordable smartphones and some of the lowest data tariffs in the region, Cambodia’s digital infrastructure is solid and improving all the time.”

While innovative payment gateways and online ordering platforms are not completely new to Cambodia, he added that despite a rise in companies that cater to purchasing bus tickets, ordering food and sending money back and forth, cash has remained the biggest stumbling block in a dollarised economy.

“If you look out into the Cambodian market, you see a lot of telcos, banks, microfinance institutions and money transfer companies trying to handle remittances, but what you don’t see is a company that fully consolidates everything into a cashless third-party payment system,” Pokorny says.

Pi Pay, which has backing from Malaysia’s CIMB Bank, will join the emerging crowd of cashless fintech solutions in Cambodia. Just last month, Acleda Bank, Cambodia’s largest bank in terms of assets, launched its own e-wallet platform, Unity ToanChet. The product plans to have two million users in five years and approximately $1 billion held digitally.

To Pokorny, this shows that financial institutions are quickly trying to adopt fintech solutions that cut down on operating costs and improve lifestyle services with low transaction fees. In his opinion, Cambodia can leapfrog other countries by observing and learning from their experiences.

“Adoption of new systems is fast, especially across the new generation of youth,” he said. “Where other, more conservative countries try to find their market niches and improvements, we are leapfrogging generations ahead and deploying solutions that are, in far more developed Europe, US or Far East, not being even dreamed about.”

Despite the lofty ambitions of introducing an e-wallet into the Cambodian market, where financial inclusion remains limited and the understanding of technological advancements can be hard to grasp, Pokorny was confident that it is only a matter of time before digital services take off.

“What Cambodia has over other countries is that we can build our own infrastructure without having to overcome the use of cards,” he said. “We can start it here and at the end of the day it allows us to launch with a midscale investment and watch how it grows.”

He added that while Cambodia is strategically positioned to learn from cashless strategies in neighbouring countries like Vietnam and Thailand, and the larger ones of India and Japan, the risk of introducing cutting-edge technology was mitigated.

“Other countries are exploring contactless card solutions, advanced online banking systems and more,” he said. “But we, in Cambodia, are working on mobile payments, biometric technologies and other innovations at lower costs.”

Despite the relatively low investment capital and the low risk of launching fintech cashless systems on a proprietary scale, Cambodia still has a long way to go before it is more than an incubator hub for innovative solutions.

“While we believe that the consumer market here is ready to adopt secure and convenient digital payment systems that blend with and enhance people’s increasingly connected lifestyles,” Pokorny explained, “a payment system needs to offer more than just payments.”

“It also needs to offer loyalty programmes, chat functionality and other enhanced features that make them attractive for other reasons than just the payment side of things, although making that secure and convenient is still a key feature.”

With an e-commerce law drafted in 2008 but yet to be adopted, Cambodia remains behind regional leaders in terms of regulation – a sign that a recent United Nations Conference on Trade and Development survey showed was the largest barrier to growth. But Pokorny said the private sector was charging ahead by incorporating international standards themselves.

I have seen both older conglomerates as well as new start-ups begin the adoption of international standards.

“I have seen both older conglomerates as well as new start-ups begin the adoption of international standards, compliance, certifications and more,” he said. “This is a good sign as it shows that having security and properly developed, established, tested and recognised technologies behind any company, especially in the fintech industry, is what can make or break you.”


Words by Kali Kotoski