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
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
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
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.