VISITORS to Cambodia could be forgiven for arriving with

a wallet full of plastic and less than accurate

assumptions. Tourists and those on business from

countries where credit is common currency may be spotted

casually flashing American Express, MasterCard or Visa in

vain until the cultural adjustment has been made and they

learn to carry cash.

They may have been convinced by glossy advertisements

that the friendly face of credit is acceptable wherever

they choose to go. Desert islands, underdeveloped

countries and exotic destinations alike, the implication

is that whichever piece of plastic you carry, that is

your guarantee of service with a smile, not to mention

emergency funds and assistance when things do not go

according to plan.

But Visa is not Coca-Cola. Despite its marketing efforts,

it does not yet speak a language understood by an entire

planet. After all, it is only a privileged minority that

has the opportunity to apply for a credit card, and even

among that minority, applications can be refused for

seemingly arbitrary (and unexplained) reasons.

Nevertheless, Cambodian banks and service industries,

with an ever- optimistic eye on the development of

tourism, are learning to cater to the assumptions of an

exacting customer base.

And the credit card companies are underscoring that

optimism by encouraging business acquisition in the

country. In June, Cambodia Mekong Bank (CMB) became the

country's first bank to hook up directly to VisaNet, Visa

International's global authorization and settlement

network.

This means all Visa transactions through CMB will no

longer be routed through an intermediary country, but

will connect electronically direct to Visa International,

saving time, trouble and money.

For CMB's business partners, it means transactions are

immediately authorized and settlement has been reduced

from two weeks to four days. For the bank, the increase

in efficiency is accompanied by a quantum leapin

security. Instant, reliable authorization means the

burden of payment passes out of the hands of CMB and

straight to the issuing bank.

And for the tourist in the banking hall, it means cash is

available in minutes, without incurring the prohibitive

transaction fees of an international phone call for

authorization. CMB charges a standard 2% handling fee,

subject to a minimum charge of $5.

Direct, on-line connection such as this is an invisible

part of a seamless service taken for granted by

cardholders. It may be just one step in the forward march

of progress, but it has not been achieved without the

technical difficulties specific to a developing country.

With no existing credit card culture, Cambodia has no

legislation to protect either the bank or the customer.

So what is normally a nine-month process, from initial

application to implementation, took a year and a half in

the case of CMB, which has just embarked on the same

process with MasterCard.

And with no local market to speak of in terms of

cardholders, CMB has had to be careful in screening

potential business partners.

"We are very selective with merchants," said

Khov Boun Chhay, CMB executive vice-president. "We

check their financial position - is the volume of

business there to provide this service or not? Secondly,

we have to know if they have the infrastructure - the

power, and the telephone line."

As a result, the qualifying businesses are limited to a

number of high-end service providers with high-volume

transactions.

In terms of human resources training and capital

investment, the deal represents a huge pledge of faith

for the future of payment transactions. There is as yet

no bank in Cambodia issuing credit cards, so the industry

is relying on winning business primarily from tourism.

With tourism and business travel to the country set to

pick up by the end of October - especially if everything

goes smoothly with the formation of a newgovernment - CMB

is confident that it has invested well.

"Our main concern is to provide a service of an

international standard," Khov Boun Chhay said.

"We are unique in that we are a local bank

connecting to an international payment system. We are

quite confident in the future."

That future depends on encouraging more people like hotel

and restaurant proprietor Charlie Maurer. "All my

life I never had a credit card," said the Swiss

owner of La Paillotte. "Wherever I go, I pay cash. I

don't want a credit card because I don't need one. It is

maybe a little bit old-fashioned."

Old-fashioned it may be, but that did not stop him from

being one of the pioneers - after the Sofitel Cambodiana

hotel - when he started accepting Visa and MasterCard in

1992.

Maurer averages two credit card transactions a day, and

says it pays off in the long run. "It's good for

someone who runs a bit short of cash," he said.

"Then they go to places where they can use the card.

Here it is a bit difficult sometimes to get cash.

Cardholders complain that the bank charges too much, so

people try not to use that service."

At nine o'clock on a weekday morning, the clientele in

the Cambodia Commercial Bank (CCB) is decidedly Western.

Accepting Visa, MasterCard and JCB, it is the one bank in

Phnom Penh (with a branch in Siem Reap) listed in the

Lonely Planet as providing credit card cash advances

without inflicting any charges. CCB also arranges

settlement of credit card payments for businesses

including La Paillotte.

But now CMB's deal with VisaNet has set a precedent,

which Khov Boun Chhay said other banks are due to follow.

Competition among banks for credit card customers is set

to increase as services are upgraded and expanded.

Cambodia's financial services industry may be behind the

curve, but CMB has set its sights on issuing its first

credit card by the end of 1999. And by the year 2000,

Khov Boun Chhay anticipates a completely new phenomenon

for Cambodia - its first ATM.