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MasterCard debit and credit cards are reportedly enjoying strong growth in the Kingdom. Bloomberg
MasterCard debit and credit cards are reportedly enjoying strong growth in the Kingdom. Bloomberg

Payment card gains traction

MasterCard, the plastic payment-card brand of global financial services firm MasterCard Worldwide, has been present in the Kingdom since 2001, but until recently it was relatively unknown to most Cambodians. However, there are signs its signature debit and credit cards are poised for robust growth and widespread acceptance.

To date, MasterCard has partnered with 13 banks – including six with foreign-owned banks – in Cambodia to deliver its products.

According to a local representative, the total number of MasterCard debit and credit cards issued in Cambodia grew 22 per cent during the one-year period through March 2016. However, the company’s latest partnership, announced last month with Acleda Bank, could push next year’s growth even higher.

Thuy Tran, director of marketing and account relationships at MasterCard Indochina, said the tie-in with the Kingdom’s largest bank – with over 1.6 million depositors and $4.2 billion in assets – is expected to drive MasterCard’s growth in the Kingdom and reduce the reliance on cash transactions.

“Our partnership with Acleda Bank marks a significant milestone in the nation’s journey towards becoming a cashless society,” he said. “Through partnerships such as this, we hope to encourage the adoption and growth of electronic payments, ultimately driving greater financial inclusion in Cambodia.”

According to the central bank, 1.4 million debit cards and nearly 40,000 credit cards were issued in the Kingdom last year. Acleda Bank was the largest single issuer of these payment cards, boasting nearly 60 per cent of debit cards and over a quarter of all credit cards in the market.

So Phonnary, executive vice president and group COO of Acleda Bank, said the bank has processed payments of MasterCard products issued by other banks since 2013. However, with Cambodians increasingly using the card for electronic payments, the bank decided it was time to issue its own MasterCard payment cards.

“Electronic banking is helping to develop payment systems in our country, which can reduce the dependency on cash-based transactions,” she said.

Phonnary added that electronic transactions improve banking by removing the time-consuming task of counting banknotes and concern over receiving bogus bills.

Tran, however, sees broader economic benefits in using debit and credit cards in place of cash

“An economy benefits from the savings derived by using electronic payments as the cost of using cash – the printing and circulation of cash – can cost up from 0.5 to 1.5 per cent of a nation’s GDP,” he said.

He added that electronic payments provide a more efficient and transparent payment method over cash, and are generally safer and more convenient to use.

While MasterCard has seen strong growth in recent years, it still lags behind VISA in terms of visibility and acceptance at the estimated 10,000 point-of-sale (POS) terminals nationwide, merchants say.

Chim Vandeth, a sales employee at Limhong Fashion Shop, said he has seen a steady increase in the use of payment cards for customer purchases. He estimates at least 30 per cent of transactions are now by VISA or MasterCard.

“I’ve seen our customers make payments at our shop’s POS every day,” he said. “The majority of them use VISA, while MasterCard is infrequently used.”

However, as more Cambodians become accustomed to electronic payments, both payment card brands can expect strong growth.

Additional reporting by Kali Ray Kotoski

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