More than 50 payment companies are offering cashless services to customers, a rise from between five to 10 payment companies in the past two years.
The figure was released at the Cambodia Fintech Day 2019 on Wednesday in Phnom Penh, by Bora Kem, of Mekong Strategic Partners (MSP), an advisory services and investment management firm, specialising in the countries of the Greater Mekong Region.
The cashless digital payment market in Cambodia is expected to be worth $3.46 billion next year but the non-digital payment will still remain large, the firm says.
MSP’s report shows that the total cashless digital payment market in Cambodia is estimated to reach $2.21 billion this year, a 38 percent rise from 2018.
The digital payments market in Cambodia mostly refers to payment gateways, payment via point of sale (POS), tourist payments, bill payments, business payments, domestic remittances and international remittances, according to the report.
It added cash payments will still be large at around $1.9 billion this year and are expected to reach $3 billion in 2020.
The report excluded domestic agent-based transfers, card payment transactions, e-banking and business-to-business (B2B) wire transfers.
Mr Bora added that Cambodians are now more aware of the advantages of financial technology, while, the Central Bank also issued more licences to private companies to operate as payment service providers, so that those companies can invest and offer more services to the market.
“Fewer than 10 percent of the users are now adopting financial technology through bank accounts or mobile apps. However, the majority of consumers still depend on money transfers and payment agents such as Wing and TrueMoney among others,” Mr Bora added.
“More than 1 million users are using financial technology to conduct transactions through money transfers or payment agents, but a lot of people are still not aware that mobile phones can be used to conduct transactions, so opportunities are there,” he added. He said that the local market has little awareness of using mobile phones for daily transactions and needs more.
On top of this, if all the financial institutions pushed their customers to use mobile apps, it will encourage financial technology to develop faster.
Neav Chanthana, deputy governor of the National Bank of Cambodia, who presided over the Cambodia Fintech Day 2019, said that fintech has a growing importance in the market. She also emphasised the significant role that innovation plays in promoting efficiency in payment systems and the balance between innovation and stability which NBC, as the regulator, has to fulfill to protect the customers’ interests and maintain public confidence in the financial sector.
Ms Chanthana added that Cambodia Fintech Day was held to provide a platform to interact among government officials, policymakers, regulators, bankers, and fintech players to discuss the growing importance of fintech and the financial system in Cambodia as well as the opportunities and challenges that fintech can bring to Cambodian financial sectors.
“The information and knowledge obtained from this event will be an important input for policymakers and authorities to better understand the current development of fintech around the globe and in Cambodia and to better design policies and regulations to support the growth of fintech in Cambodia,” Ms Chanthana said.
Given the significant growth of payment and remittance services, NBC issued a regulation on the management of payment service institutions to support the innovation and adopt fintech. As a result, many new payment services and instruments are being introduced and the number of electronic payments has accelerated significantly.
In addition, the fintech roadmap will also be formulated under technical assistance from ADB to leverage the advantage of fintech innovation to support the development of the banking system and financial inclusion. A system known as National Strategic Financial Inclusion 2019-2025 was officially adopted on Aug 19.