Digital cash services in Cambodia showed marked increases in users and cash flow in 2011, and still more growth is expected this year as operators launch new services and partnerships to capture a large but still-untapped rural market.
The services, in which customers transfer money via their mobile phones, have in a few short years formed a fledgling market in the Kingdom with about 400,000 users, according to the National Bank of Cambodia.
Australian and New Zealand Banking Group Ltd, which has a partnership with domestic conglomerate Royal Group in ANZ Royal Bank, established WING in Cambodia in 2009.
ACLEDA Bank’s Unity hit the market in 2010, followed by CamGSM’s Cellcard Cash last year. CamGSM is owned by Royal Group.
Unity, which now requires users to hold an ACLEDA account, saw a 547 per cent increase in cash flow in 2011, with more than $64 million in total transactions, according to ACLEDA senior vice president for marketing Sok Sophea.
The bank expects its more than 50,000 users to double this year, Sok Sophea said.
Next month, ACLEDA will allow mobile money accounts for people who don’t have bank accounts, she said.
The move could promote digital cash services in Cambodia’s countryside where ACLEDA enjoys a significant presence yet technological understanding and access is still low.
“The biggest difficulty is that people’s knowledge is limited because they are used to using their mobile phones for receiving calls only. Another problem is that some phone models don’t support our applications,” Sok Sophea said.
While about 34 per cent of Unity users lived in the countryside last year, rural dwellers accounted for 60 per cent of WING customers.
“What we are finding is that there is a huge, untapped market in the countryside,” Refresh Mobile executive director Ian Watson said. Refresh bought WING from ANZ Royal in mid-November.
“People who work in Phnom Penh are sending money back to their families in the provinces. You also have people in rural areas sending money to university students in the city.”
WING reported an average of 5 million transactions per month in 2011 on its some 850 portals throughout the country, Watson said, though he declined to disclose transaction values or the number of WING customers.
Cellcard chief operating officer Kay Lot also declined to provide figures for the company’s Cash service, but he said he expected significant growth this year.
The market for digital cash services was not highly competitive and had big potential, he said.
The majority of Cellcard Cash customers were based in cities last year, Kay Lot said. He echoed sentiments from ACLEDA’s Sok Sophea, saying a general ignorance about technology, as well as a lack of services in English, remained a problem for market expansion into rural areas.
WING is looking to partner with Cambodia’s microfinance institutions, which largely serve the country’s rural, un-banked population with small loans, according to Refresh’s Watson.
Becoming a conduit for MFI transactions could mean substantial rural growth for WING. MFI loans outstanding in January were at more than $500 million, according to Kalyan Mey, senior advisor to Cambodia’s Supreme National Economic Council.
WING held a workshop for MFIs on Friday at NagaWorld Hotel. While most MFI representatives said partnerships could reduce spending on the agents who collect and disperse loans in person, others were wary of implementing the technology.
Hong Keovmony, information technology officer at Green Central Mirco Finance Ltd, said that such a partnership would take time because he didn’t understand several of the technical aspects of the mobile cash service.
“We are not clear about how it will work between the MFI and the customer. But we plan to learn more about it,” he said at the WING workshop last week.