While Cambodia’s e-commerce sector has been slow to take off, a bevy of tech companies are clamouring to give it momentum by developing online payment solutions for a largely unbanked population where cash remains king for consumer purchases.

Mike Gaertner, chief operating officer of digital media and entertainment company Sabay Digital, said he has pushed for his company to rapidly move towards accepting online payments, and hopes the company will operate completely cash-free by the end of 2017.

He explained that most telecom and digital media companies rely on paper-based payments that require costly networks of agents spread around the country distributing scratch cards to customers for payments.

While he said there was little sign that scratch card usage would diminish anytime soon, their use is “a huge logistical challenge to actually manage paper cards and then deliver them all over Cambodia and have them where there is demand”.

Gaertner posits that with the banking sector booming and debit card use expanding local financial institutions are missing out on the profits from digital platforms because they have not yet developed online payment systems.

“There are about $2.5 billion dollars in direct deposits, which means that the money is available to be drawn from the bank with no notice,” he said, citing central bank data.

“[That’s] $2.5 billion sitting in banks, [with over] 1.5 million ATM cards, 800,000 issued by Acleda alone. There seems to be a huge potential of actually unlocking that money for e-commerce.”

According to Gaertner, Acleda is the only bank to have developed its own online payment gateway for its ATM cards. However, the process of integrating this payment system into a company’s e-commerce platform has proven too lengthy and technically challenging for many smaller firms.

He said a significant improvement in accessibility would be needed for entrepreneurs to access payment platforms and unlock the latent potential of e-commerce. However, with the combination of relatively low financial literacy and a well-developed cash-on-delivery (COD) system, online payments have not been a big priority for many local businesses and their customers.

“The need to make the payment online for customers does not really exist because 95 percent of sellers accept pay-on-delivery,” he said.

Chris McCarthy, CEO of Mango Tango, a local-based marketing and media firm that was contracted to publish a yet to be released report on the country’s e-commerce market for the Asia Development Bank (ADB), said a survey for the report found that merchants believe the central bank should be more active in pushing e-payments and that local banks should invest more in digital services.

“Merchants complain that the banks are difficult to work with, and that they are unwilling to work with even mid-sized companies,” he said.

However, the company’s survey found banks themselves do not have the financial resources to facilitate e-payment integration, especially for smaller sized businesses.

Several private firms are pushing for the development of forms of online payments, McCarthy said, citing Wing, TrueMoney, eMoney, Pay&Go and Smart, though many of those services still require physical agents for people to go and deposit money on their virtual accounts.

Moreover, businesses cannot integrate the platforms of the various payment providers all at once, and must individually work with every different service.

“Merchants who want to accept cashless payments find it expensive and difficult to do so because there are so many options, and the various merchant payment systems available are not inter-operable,” he said.

Evgeny Kagay, general manager of Pay&Go, a local payment collection platform that offers services through kiosks as well as through a desktop and mobile application, said few Cambodians understand how digital transactions work, and even fewer are willing or able to conduct online payments.

One localised solution developed by Pay&Go is an online MasterCard service that allows unbanked customers to make purchases online without having to set up a bank account. However, Kagay admits the product’s adoption has been slow, especially in the provinces.

“Obviously we all want to make money and make sure our business is visible and prospers, but all in all we want the people of Cambodia . . . to be able to understand the simple ways they can make very necessary day-to-day money transactions,” he said.

While Phnom Penh is proving to be quicker at adapting digital transactions, the rest of the country remains “very underdeveloped,” he added.