Acleda Bank unveiled a new cashless-based e-wallet product yesterday that allows customers to use their smartphones for transactions without incurring service fees.

The product, called Acleda Unity ToanChet, is a fintech application that allows customers to transfer funds and pay bills wirelessly on both iPhone and Android devices.

In Channy, CEO of Acleda, said that the service would help boost financial inclusion in Cambodia by allowing customers to conduct online banking services while reducing the need to carry cash. He declined to disclose how much ToanChet cost to develop internally but said the bank would spend $2 million to deploy the necessary infrastructure.

“From now on, people do not need to withdraw cash like before because Acleda Unity ToanChet takes over the role of a traditional wallet,” he said. “All Cambodians including vegetable sellers, moto-dop drivers, tuk-tuk drivers and all classes of people can use the service to make payments for products and services.”

Acleda, which launched its online Unity product in 2010, allowed customers to pay bills through their phones but charged a service fee. The ToanChet upgrade will enable customers to make transactions from $2,500 to $0.25 without a fee and allows them to transfer funds from one phone to another with a maximum transaction amount of $500.

Channy claimed that the bank already had 12,000 users signed up for ToanChet yesterday and expects it will be used by at least 2 million customers in the next five years, holding nearly $1 billion worth of funds digitally.

Ngeth Chou, a senior consultant at Emerging Markets Consulting (EMC), said that the launch of the product was a good step towards the greater adoption of fintech solutions while still keeping funds within the banking sector.

“Making payments directly through smartphones allows the money to remain in the banking system because the transaction is done digitally,” he said. Chou added that the product would also help develop the nascent e-commerce sector.

“The challenge for e-commerce is that we do not have a complete payment system,” he said. “When more people use digital products to access banking and payment services, it will help to boost the sector.”