While Cambodia remains a largely cash-based society, the market for financial technology has begun to expand through online payment services and mobile e-wallets like Pi Pay. The Post’s Robin Spiess sat down with Pi Pay CEO Tomas Pokorny to discuss the future of economic digitisation in the Kingdom.

Pi Pay has been in beta testing for about six months. How much business has it attracted?

Since our launch, we have had over 165,000 downloads of our app, and 70 to 80 percent of those downloads are active. We have processed over $27 million and had about 1.7 million transactions as of today.

We operate with about 1,600 merchants right now. It always takes time to train each of the merchants we work with, but by next year we plan to have agreements with 5,000 merchants.

Your business model relies on attracting customers by offering heavy discounts. Is this sustainable?

There are rumours that Pi Pay is going to be putting an end to the discounts we offer soon, now that the app has attracted enough customers.

Of course, our marketing strategy has always been dependent on attracting customers through our promotions, and there is no reason to hide that fact. Our main goal is to prove to the Cambodian market that financial digitisation can save you time and money, but the first things people see are the promotions we might offer, so we decided to incorporate them into our business model.

We will always offer promotions, though they may not be as high as they were initially. We like to assist merchants in attracting business by offering promotions at times when they might usually experience a lull in patronage, so the promotions help us both.

How do you anticipate expanding your business in the future?

In Cambodia, we are striving for financial inclusion of everyone, and intend to expand beyond Phnom Penh soon, starting with Siem Reap and Sihanoukville and then tapping into rural areas in the second half of next year.

Cambodia is a small market, though, so our goal is to eventually expand beyond its borders in about two or three years. Essentially, we want to pursue partnerships, both domestically and internationally, and this Wednesday we will be announcing a new partnership which we hope will start bringing more income to Cambodian businesses.

Online banking and financial services are becoming more common in Cambodia. Do you see competition growing in the near future?

Each market has a saturation point, and I think for online financial services, Cambodia is reaching it. The Kingdom can support about two or three payment services, I think, but that just means the others will have to consolidate through partnerships. Next year there will be a lot of companies competing, but before 2020 I think the market will be much more mature.

How is financial literacy expanding in Cambodia?

Some experts in finance complain that many Cambodians don’t understand fundamental financial concepts, like banking and saving, and in some ways they are correct. Many argue that Cambodia has very low financial literacy rates.

I think of it slightly differently. There are nearly 4 million people here aged between 14 and 30, and most are literate enough to use technology like smart phones. There’s a fine line between technological literacy and financial literacy. Likely, when you are technically skilled, you know elementary terms about financing. I think that most young people know they can send money from province to province, for example, from their phones.

When it comes to expanding financial literacy, the biggest thing we need to improve is social responsibility. If these young people using financial services like bank accounts and online payment services started to share the knowledge they have with older generations, I think there would be a lot more financial activity.

Cambodia is a cash-based society. Does this pose serious problems for the expansion of online banking and payment services?

Everything here is in cash. It’s very hard to monitor, so anything at this stage that helps create a solid financial structure will really help support businesses and the government as well.

Some analysts think Cambodia’s cash-based system is bad for fintech [financial technology] businesses, but if Pi Pay were to try to launch in Hong Kong instead, we would not get much traction.

Cambodia is a great launcher market. Here you can launch solutions, see the public’s reactions, better your services and then expand into neighbouring countries. In other, more financially mature countries, people want services that are already tried and tested. Because Cambodia offers a clear playing field, I think this country could be a fintech launching site for Southeast Asia.

This interview has been edited for length and clarity.