Digital payments have made slow headway in Cambodia, where much of the population remains unbanked and e-commerce sites rely almost solely on cash-on-delivery payments. The Post’s Matthieu de Gaudemar sat down with Steven Path, CEO of local software firm Pathmazing and president of the ICT Federation, to discuss the recent launch of the company’s new cashless payment platform, Tesjor, and the overall state of the digital payment sector.
What is the significance of launching the first entirely cashless e-commerce platform for Cambodia?
I would say it is very significant because our country has been in a “cash is king” mentality and banks still have a very small penetration. We need more Cambodians to deposit money in bank accounts, or at least get it to some institution so that it can be used for e-commerce.
Once you deposit the money into those banks, then you can start using those funds for e-payments. That is why we think it is significant to roll out a platform like this that provides a lot of incentives for locals to try out e-commerce and see what all the buzz is about.
Tesjor clients offer discounts exclusively to online shoppers. Will these incentives convince people to join the digital economy instead of relying on cash for payments?
Yes, we believe so. Creating consumer demand is one thing, but if they are thinking, ‘why would I buy online if I can get the same thing by just going in person?’ what’s the difference for them then?
Expats already understand e-commerce because in their country, e-commerce is fully matured, whereas in Cambodia, it is at a very infant stage.
If there are no major incentives, it’s not going to be enough to push locals to really give this a try.
What role should the government play in developing a digital economy?
We have to make the whole ecosystem secure, especially for financial transactions. The government needs to finally approve the e-commerce law and then implement it because having a legal framework is very important. It would not help this industry, which is at such an infant stage, if there are already problems with e-payments security and authentication, so we need to work with the government on that.
Already, the central bank is working to govern e-wallets to help protect the consumer and their data and privacy. There is also a government prakas coming soon requiring companies behind e-wallets to have $2 million in capital, to make sure that they are financially very secure.
What is the impact of conducting e-commerce without legislation on e-commerce law in place?
For us, the government let us go ahead and said, ‘move forward with your e-commerce products and then we will catch up later’.
For the government to approve the e-commerce law and then implement it, it could take some time, so the proactive approach is to understand international e-commerce laws and use them as a guideline. As long as we follow the international standards for e-commerce regulations, we don’t think we will need to make any major adjustments once the e-commerce law is implemented.
How essential is e-commerce to advancing Cambodia’s digital economy?
With e-commerce, of course comes digital payments and I think it is inevitable that the whole e-commerce ecosystem will help grow the ICT industry significantly.
We believe the digital economy will expand into a multi-billion dollar industry in the future. Right now, the total value of the ICT industry is around $800 million. If we are going to hit the $1 billion milestone and go beyond that, we need to accelerate e-commerce adoption in the country.
This interview has been edited for length and clarity