Cambodia's reluctance to adopt e-commerce systems such as PayPal must change if the Kingdom is to become part of the ASEAN Economic Community in 2015, business experts say.

The absence of an electronic payment gateway like PayPal is often seen as the biggest impediment to e-commerce in Cambodia, along with the lack of credit card use and low internet penetration, although that is changing, according to John Weeks, project manager and web developer for Open Development Cambodia.

“The financial community strongly desires e-commerce and will find solutions. There is also a strong demand from the consumers,” he said.

So far delays have hampered the implementation of an e-commerce law, but experts say the fact there is a law at all is a change from Cambodia’s ‘wild west’ reputation, when regulations were minimal.

WING chief operating officer Anthony Perkins said the hesitation over e-commerce was a result of other issues faced by Cambodian consumers.

“One of the biggest barriers here is the lack of a postal system, you can’t deliver bills [or goods],” he said, limiting the range over which a business can reach customers.

Last month the Post reported that WING was working on an electronic payment gateway aimed at launching in early 2013.

Perkins also mentioned the lack of large retailers, cultural attitudes towards banking and credit cards, and ATM and banking interchange systems as hindrances to the establishment of true e-commerce.

The entrance of Rocket Internet to Cambodia last month and the establishment of shop.com.kh appears to be the first attempt at online business-to-customer commerce, though all goods purchased are paid upon delivery, and delivered through a private courier service, without credit cards or electronic payment methods.

Rocket Internet CEO Shin Kun Yoon says internet penetration is the biggest factor in furthering e-commerce in Cambodia, rather than any changes that will result from the AEC.

“For e-commerce I think it’s completely dependent on internet penetration, the economics [of a country] don’t affect it, it comes naturally as internet penetration increases. People use the internet but will have nowhere to go so new business models will arise.”

Cambodia’s previous forays into e-commerce have been via customer-to-customer businesses such as Khmer24 and BongThom.com, which rely on advertising revenue that must be collected by hand rather than paid through an online payment gateway, and operate much in the way a traditional market does where Cambodians can peruse many merchants to compare prices before purchasing, said general manager of Khmer24 Ty Rady.

“Before, shops waited for customers to walk in, now they advertise everything online and customers check prices online now, on Khmer24, before they go to the shop to buy what they want. They will tell the shop owner that they saw the same item for a lower price elsewhere,” he said.

Ty Rady said Cambodia had a long way to go before it had anything resembling the e-commerce use enjoyed by the rest of the world, including a common payment system.

He highlighted the need for policy and a delivery system for goods as equally important. “We need the government to help do this also.”

Managing Director of Opus Cambodia, Phillip Butler, sees a need for e-commerce as it will help Cambodia thrive.

“It opens up more opportunities for revenue. NGOs are turning to the web for fundraising, so it will be beneficial to Cambodia, but the lack of payment gateways has been an issue.”

The e-commerce law is once again under review by the Ministry of Commerce according to Secretary of State Pan Sorasak, after World Bank funding was halted last year. No date has been given for its ratification by the National Assembly.

To contact the reporter on this story: Gregory Pellechi at [email protected]