Financial services have to be more accessible, affordable, and convenient for the unbanked
Cash is the undisputed king in Cambodia—at least for now. The growth of cashless transactions through mobile payments will soon change the country’s financial landscape.
High mobile phone usage and connectivity, as well as low banking penetration rate, make the mobile payment market profitable in this developing Southeast Asian country.
An Open Institute survey revealed that 96% of Cambodians aged 15 to 65 own a mobile phone, with over 10 million total units used.
Cambodia’s 173% mobile connectivity is also the highest in Southeast Asia. It beats the regional average (133%) and even outranks Singapore (142%), according to We Are Social’s Digital in 2017 report.
With only 5% of the population having a bank account (per 2016 KPMG study), a huge gap needs to be filled. Financial services have to be more accessible, affordable, and convenient for unbanked Cambodians.
This presents a promising opportunity for the mobile payments industry.
Photo credit: Propelrr
In the Open Institute survey, seven in every 10 Cambodians find value in the financial services provided by mobile payments companies. Only 30% said they had never used any mobile payment system. Most mobile payment transactions are money transfers (85% for sending money; 74% for receiving money) and bill payments (15%).
Fintech startups can learn a thing or two from how mobile payment services in Cambodia respond to market demands. What best practices can businesses pick up and emulate?
Also read: Outpost, Geeks In Cambodia join forces to sponsor local startup
1. Tailor products and services to local culture
Everything starts with a deep understanding of your target market—their motivations, needs, behaviors, and culture—and then develop your products and services based on that knowledge.
A notable case example is that of Wing, a major player in the Cambodian mobile payment industry. For several months prior to its launch in 2009, the company did market research and product development, examining the nuances of Khmer culture and needs of the unbanked.
The homegrown mobile payments company in Cambodia defined its unique product features for easier access to its services. Non-customers can use its mobile payment system to receive funds from customers. This is helpful in rural areas with little to no access to mobile technology. Also, its services work with most Cambodian mobile network operators, which differs from operator-based mobile banking products.
2. Evolve fast with changing market demands
To stay relevant, a business has to constantly meet consumer needs. Tech innovations such as mobile app development enable mobile payments companies to reach people on the go. For example, a smartphone user in Cambodia can use a mobile app to conveniently send money, pay bills, top up phone credits, and access other financial services.
Beyond just providing consumers the technology to make their lives easier, mobile payment service providers in Cambodia are continuously innovating their apps to address the specific needs of their target market.
Just a year after its launch in 2016, Wing updated its mobile app to improve its user experience. The company, for instance, added an Online Mastercard feature to eliminate the need for a physical credit card to shop and pay online. To date, the mobile payment app has over 200,000 mobile users.
Photo credit: Propelrr
While Wing Money in Cambodia has always been first in the many fintech related features using mobile app, providing the most complete plethora of products available to the Cambodian market, a lot of payment apps are popping up.
ABA Bank’s E-Cash mobile payment service is also worth noting. This mobile app feature allows convenient money transfer to Cambodians who have no bank accounts. Recipients can withdraw cash from an ATM without using a card. They just need to enter their phone number and the security code generated from the sender’s transaction.
Pi Pay, a cashless payment app in Cambodia, features a simple, fun, and trendy mobile app design, with custom emoticons and an interesting colour choice of pink. This is apparently to entice young and techie Cambodians. The app also has built-in video chat messaging that appeal to millennial consumers.
Like other mobile payment apps, the SmartLuy mobile app provides money transfer services. But it distinguishes itself by focusing on its mobile money or e-wallet service. Smart Axiata, the company behind it, positions the app as a cheap and convenient digital payment alternative to cash and credit card payments and over-the-counter bank transactions.
3. Develop synergies with banks
Mobile payments in Cambodia are an alternative to the services of traditional financial institutions. But that does not mean these two seemingly worlds-apart services should always compete against each other. In fact, these entities can work together to improve their offerings.
A RiskFrontier Consulting report notes that mobile payment companies can benefit from partnering with banks to tap their technical know-how, initial customer acquisition (through a bank’s existing clients), and investment capital.
PayGo, also a Cambodian mobile payment company, collaborated with ABA Bank, one of the country’s top private financial institutions. This partnership resulted in creating a virtual credit card that makes online payments faster for its customers.
For its part, Pi Pay teamed up with CIMB Bank in Malaysia and Wirecard, a global payment tech provider in Germany, to provide secure and efficient mobile payment services. CIMB Bank manages all things related to client deposit and merchant payment, while Wirecard helps ensure online payment processing security.
When it started, Wing gained from the brand recognition and client network of its founding parent, Australia’s ANZ Bank. Today, the Cambodian mobile payment services provider has partnered with various banks in countries where Cambodian migrant workers are based. Last year, it closed deals with South Korea’s Kookmin Bank and Thailand’s Kasikornbank to facilitate quick money transfer between these countries and Cambodia. This marks the company’s foray into the overseas money remittance market.
According to Wing CEO, Jojo Malolos, “There are many other features of the mobile payments app that are equally useful with the new released online Mastercard. Transfer from a bank account to a Wing account marries the banked to the unbanked, and the ability of the unbanked to withdraw and deposit money in their branches. Aside from that, huge discounts on restaurants, hotels, airfares, bus trips are now made available to them ever conveniently, be it a dream trip or a special dinner. Access to once-in-a-lifetime luxury and comfort is also made inclusive.”
Also read: Beyond banking, here are 4 ways fintech innovations are influencing industries today
4. Raise brand awareness through consumer education
It is not enough that your mobile payment services are good—people have to know and be convinced that you’re offering something useful to them. In Cambodia, mobile payments companies have created TV and radio ads that highlight the advantages of availing their services compared to paying with cash: low cost, ease of use, convenience, safety, and security.
To build customer trust, Wing has tapped into local microfinance institutions (MFIs) as its network of sales agents. It also recruited small businesses such as pharmacies, supermarkets, and foreign exchange outlets as agents. These networks have established relationships with potential customers, and they are perceived as peers or experts in using mobile payments. Because of that, people go to them for advice, making it easier to trust in the mobile payment system.
Final notes
Cambodia may be no match against mobile payment market giants in Asia such as China and India. But it’s definitely alive and kicking. From product development to innovation and marketing, the mobile payments industry has been able to show the Cambodian market the benefits of going cashless via mobile versus traditional payment methods.
The key ingredient to the company’s success is its deep-dive understanding of the Cambodian
customers’ motivation to use its products and services. The entire value chain creation is solid.
The entry of newer players (such as True Money, SmartLuy, and Asia Wei Luy) has intensified the competition in the Cambodian mobile payments market. This brings a new, exciting challenge to other companies: how will they further differentiate themselves and offer consumers something unique and valuable? Let’s see how this development will shape the future of mobile payment industry in Cambodia.
Come to think of it, Cambodians are now more empowered than probably some of the other Asian neighboring countries. In fact, as early as February 2017, street hawkers and vendors as well as tuktuk drivers were already able to receive payments using QR Codes through the Pay with Wing feature of the mobile app. In the Philippines, such QR Code payment capability was only released just recently. Cambodia is surprisingly ahead of the Philippines.
Go figure.
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