With concern about the possible spread of the potentially deadly COVID-19 may survive for days on banknotes, there are more calls for a cashless society.
For the latest Cambodian Business news, visit Khmer Times Business
A spokesperson at the World Health Organization (WHO) suggested that customers should wash their hands after touching notes because of fears of infection from them.
A US door-to-door delivery service recently reported it has stopped accepting cash. A nonprofit bookstore, Open Books in Chicago, also told its customer not to use cash. The Central Bank in South Korea burned and replaced all banknote while Poland quarantined its for two weeks.
The National Bank of Cambodia (NBC) recently called for the use of electronic methods for settlement rather than using cash to prevent the possible spread of the COVID-19 pandemic.
In an attempt to join the effort to fight the spread of the virus, the state-run Electricity Authority of Cambodia is also asking all licensed private electricity distributors to establish alternative options for paying bills without cash where possible. The move would help Cambodians to embrace wider cashless payments and improve their understanding of financial technology, still in its infancy here.
According to the NBC’s report, a total of 27 banking and financial institutions have been providing internet banking services and 21 banking and financial institutions have been providing mobile banking services.
More than 50 payment companies are offering cashless services to customers, a rise of between five and 10 payment companies in the past two years, according a report from Mekong Strategic Partners (MSP), in which it said the total cashless digital payment market in Cambodia was estimated at $2.21 billion in 2019, a 38 percent rise from the year before.
The cashless digital payment market in Cambodia is expected to be worth $3.46 billion in 2020 but the non-digital payment will still remain large, the company stated.
“Fewer than 10 percent of users are now adopting financial technology through bank accounts or mobile apps,” said Bora Kem, an investment manager at MSP, that, specialises in the Greater Mekong Region. “However, the majority of consumers still depend on money transfers and payment agents such as Wing and TrueMoney among others,” he said, adding that more than 1 million users are using financial technology to conduct transactions through money transfers or payment agents.
“There are still a lot of people who are not aware that mobile phones can be used to conduct transactions, so opportunities are there,” Bora explained, adding that the local market has little awareness of using mobile phones for daily transactions and needs more.
Tomas Pokorny, CEO of Pi Pay, a digital wallet for Cambodia, said there will be a much-heightened awareness around cashless payments after the health crisis. He added that hygiene is the number one priority in combating COVID-19, and people are more cautious of the items they come into contact with, including cash.
Like door handles or other frequently touched surfaces, cash can carry the virus and spread it on contact.
In an effort to support the regulators especially in the current situation, Pokorny said all retailers and businesses are encouraged to opt for cashless payments to keep their employees and customers safe. “To this end, Pi Pay is making it easier for everyone to accept cashless payments free by utilising our user-merchant blended model,” he said.
“We are confident that people are now more receptive to make that behavioural switch from cash to cashless,” he noted.
He said the trend in the use of mobile payment platforms in Cambodia continues to grow because a number of firms entered the market in recent years.
“While we see a trend of growth in the use of digital payments, there is still room for improvement in terms of adoption rates, especially among the rural population.At Pi Pay, integration with the formal financial sector remains a key priority for us. By partnering with established banks and MFIs across the country, both city residents and rural folks can easily use digital payments,” he explained.
Increased security, minimised instances of fake bills or incorrect change and greater efficiency, which all of these have encouraged more and more users and merchants to appreciate the convenience of going cashless.
Despite the Cambodian economy being heavily reliant on cash, new methods of paying electronically are gaining traction with consumers.
Based on Visa’s latest Consumer Payment Attitudes Study, 79 percent of respondents expect to be using cashless payments at supermarkets and hypermarkets in the future.
A third of Cambodian respondents are interested in using cards to make contactless payments and a little over a third (36 percent) are interested in using smartphones to make contactless payments.