Payments Landscape in Cambodia: Opportunities and Risks to 2022

Payments Landscape in Cambodia: Opportunities and Risks to 2022

Summary

Cash remains prevalent in Cambodia, primarily due to its high unbanked population, inadequate banking infrastructure, limited public awareness of electronic payments and low acceptance of payment cards at merchant outlets. One of the major challenges to the growth of card-based payments in Cambodia is the practice of charging additional fees in the form of surcharges by merchants. However, international scheme providers such as Visa and Mastercard, along with commercial banks, are educating customers and merchants of the benefits of card-based payments, and are working to remove the practice of surcharging.

With concerted efforts by the Cambodian government and the National Bank of Cambodia (NBC), the use of cash is anticipated to decline gradually in the long term. As part of the government’s financial inclusion program, a number of banking agents, microfinance providers and specialized mobile banking service providers are being employed to provide access to financial services in underserved areas. Consequently, the number of payment cards in circulation, transaction volume and transaction value recorded robust growth during the review period (2014-18e) - a trend that is anticipated to continue over the forecast period (2018e-22f).

Debit card adoption is gradually growing, supported by the government’s financial inclusion program. The percentage of the banked population (aged 15+) in Cambodia increased from 12.7% in 2014 to 24.4% in 2018. To further enhance financial inclusion, the NBC allowed licensed micro-finance institutions (MFIs) and rural credit-specialized banks to offer basic banking services to their customers.

The pay-later card market is at the nascent stage, accounting for a tiny share of 1.9% of total payment card value in 2018. As most of the Cambodian population belong to the lower and middle class segments, and with the majority residing in rural areas, credit card use and exposure is very low. Banks also offer overdraft facilities, thereby reducing the need for a separate credit card.

To offer convenient payment solutions to their customers, all major banks in Cambodia are now developing their own mobile apps. AEON Specialized Bank launched a mobile app called AEON Wallet Cambodia in April 2018, allowing users to make in-store payments by simply scanning the merchants QR code. In July 2016, Maybank launched the Maybank2u app, enabling customers to transfer funds as well as make a payment by scanning a QR code. Similarly, ABA Bank is offering ABA PAY to allow users to make in-store and online payments by scanning merchant’s QR code.

The report "Payments Landscape in Cambodia: Opportunities and Risks to 2022", provides a top-level market analysis, information and insights into the Cambodian cards and payments industry, including -

• Current and forecast values for each market in the Cambodian cards and payments industry, including debit and credit cards


• Detailed insights into payment instruments including cheques, and cards. It also, includes an overview of the country's key alternative payment instruments


• Analysis of various market drivers and regulations governing Cambodian cards and payments industry


• Detailed analysis of strategies adopted by banks and other institutions to market debit and credit cards

Companies Mentioned: ACLEDA Bank, Advanced Bank of Asia, Canadia Bank, Phnom Penh Commercial Bank, ANZ Royal Bank, AEON Specialized Bank, Union Commercial Bank, Cathay United Bank, Visa, Mastercard

Scope

• To promote card payments in the country, the NBC collaborated with ACLEDA Bank, SATHAPANA Bank and Prasac Microfinance to launch the CSS on October 24, 2017. This platform allows customers of member banks to conduct various interbank transactions via CSS, including in-store payments, cash withdrawals, interbank fund transfers, balance enquiries and mini statements using payment cards on ATMs and POS terminals. The NBC believes that the expansion of the ATM and POS terminal network among CSS members will gradually promote electronic payments.


• To enhance the existing payment infrastructure, the NBC launched its Fast and Secure Transfer (FAST) Payment system in July 2016. FAST Payment offers a quick, secure and efficient method of conducting interbank transactions in local currencies for commercial banks and MDIs. This service is supported by over 30 major banks, including ACLEDA Bank, Cambodian Public Bank, Canadia Bank, ABA Bank, Bank for Investment and Development of Cambodia (BIDC), Phillip Bank, SATHAPANA Bank, Vattanac Bank, Cambodia Post Bank, Hong Leong Bank, Kookmin Bank and Vietnam Bank for Agriculture and Rural Development.


• The NBC has taken a number of initiatives to bring the unbanked population under the purview of the formal banking system. In this regard, in September 2018, it partnered with Visa to launch a mobile app to improve financial literacy among Cambodians. The mobile app is available on both Google Play and the App Store for free. Previously, in January 2015, the NBC joined the Alliance for Financial Inclusion (AFI) as a principle member in January 2015, to promote greater financial inclusion in the country. As part of the agreement, the NBC and the AFI are working together to develop and implement programs, including technical co-operation for capacity building which promotes and scales up innovation in financial services.

Reasons to buy

• Make strategic business decisions, using top-level historic and forecast market data, related to the Cambodian cards and payments industry and each market within it.


• Understand the key market trends and growth opportunities in the Cambodian cards and payments industry.


• Assess the competitive dynamics in the Cambodian cards and payments industry.


• Gain insights into marketing strategies used for various card types in Cambodia.


• Gain insights into key regulations governing the Cambodian cards and payments industry.