Logo of Phnom Penh Post newspaper Phnom Penh Post - Outbound travel, young population to drive UnionPay’s business next year

Outbound travel, young population to drive UnionPay’s business next year

Content image - Phnom Penh Post
Ling (above) says UnionPay is optimistic about Cambodian market due to strong economic growth. post Staff

Outbound travel, young population to drive UnionPay’s business next year

UnionPay, world’s top bankcard network promoter, is banking on Cambodia’s fast growing outbound travel and its young population to drive its business in the kingdom next year.

At present, at least 65 percent of Cambodia’s population is under the age of 30 and more Cambodians are beginning to travel abroad as purchasing power rises due to stable domestic economy.

The Shanghai-headquartered UnionPay, widely involved in electronic payment services, has issued about seven billion cards worldwide since inception, rated as world’s largest international payment brand for cards issued and transaction volume.

In the region, it has issued about 22 million bankcards until todate and is charting campaigns to tap the young tech-savvy and ambitious Cambodians to promote a cashless economy.

“The median age of Cambodians is 25 years old, it is a very young and dynamic economy because young people will spend more and more for their needs.

“We see Cambodia as a promising economy with a significant growth because of its stable macroeconomics environment, [its] open trade and investment climate and its young population,” Vincent Ling, Deputy General Manager of UnionPay International Southeast Asia, told a media roundtable event in Phnom Penh on November 19.

“With rising per capita income, more young people are travelling and more Cambodians are now travelling around the region. So the main drivers for [UnionPay’s growth] will be Cambodia’s young population and the growth in travel [outbound],” added Ling.

According the company’s study, Cambodian UnionPay card holders often visit China, Thailand, and Singapore, where they use the card to purchase jewellery, general merchandise, pay for their dining and accommodation.

UnionPay entered the Cambodian market in 2008. Its cards are accepted at over 90 percent of point of sale (POS) and used at 80 per cent of ATMs in the country.

UnionPay’s debit cardholder can access cash in local currency in 170 countries at its network of ATMs.

Cambodia has an overarching plan to transform the country into a digital economy by 2023, where its citizens will be able to adopt digital tools and cashless economy will be part of the national agenda.

“Electronic payment is the way to go, it is good for the young population. It is more secured and convenient, especially when more Cambodians are travelling abroad, we see a demand for it [bankcards].

“By 2023 Cambodia wants to be a digital economy, going cashless will spur the momentum of the economy and lead to higher productivity which will lead to stronger economic growth, and we want to play a part in the digital economy,” said Ling

Cambodia which boasts a steady economic growth and a stable political environment has become a key destination for foreign investors, including banks, insurance companies and financial institutions.

Investor sentiment remains high mainly due to the strong macroeconomic fundamentals, and the fast changing financial landscape is attracting high-profile players like UnionPay.

According to the National Bank of Cambodia, there are 37 commercial banks, 15 specialised banks, 64 microfinance institutions, seven microfinance deposit-taking institutions and 170 registered microfinance operators.

“In all the markets in Southeast Asia, Cambodia is the fastest growing market in terms of transaction volume.

“Card issuance doubled between 2016 and 2018 and local card transaction volume grew 49 per cent from January to October 2018.

“We are growing fast because we provide cost effective solutions to the 10 banks that we work with and payment solutions consumers and businesses in Cambodia,” said Ling.

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