Cash still plays dominant role in Cambodia, primarily due to high unbanked population, inadequate banking infrastructure, limited public awareness of electronic payments and low acceptance of payment cards at merchant outlets. However, the concerted efforts of the Cambodian government and the National Bank of Cambodia (NBC) are expected to gradually increase the usage of payment cards to 2022, says GlobalData, a leading data and analytics company.
GlobalData’s latest report, ‘Payments Landscape in Cambodia: Opportunities and Risks to 2022’, reveals that currently the use of payment cards is mostly limited to cash withdrawals at ATMs, with little use for payments at merchant outlets.
Kartik Challa, Payments Analyst for GlobalData, explains: “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.
To enhance the existing payment infrastructure, the National Bank of Cambodia (NBC) launched its Fast and Secure Transfer (FAST) Payment system in July 2016. Currently, it is supported by 31 major banks as well as several microfinance institutions. A year later, NBC launched Cambodian Shared Switch (CSS), a shared system that enables individuals to perform various interbank transactions.
The report states that the Cambodian payment card market is dominated by debit cards, which accounted for 95.6% (2.1 million) in terms of the number of cards in circulation and 65% of the total card payments by value in 2018. The overall card payments transaction value is forecasted to grow at a compound annual growth rate of 20% from KHR1.28tn ($318.1m) in 2018 to KHR2.65 trillion ($659.7m) in 2022.
Challa concludes: “The country’s expanding middle-class, rising investment in POS infrastructure, favorable regulatory landscape and the proliferation of alternative payment solutions such as ABA PAY, AEON Wallet Cambodia and SmartPay will further reduce cash dependency and the number of card-based payments is forecast to increase from three million in 2018 to 5.9 million in 2022.”