Cash may be king in Cambodia, but Pi Pay Asia is banking on rising smartphone penetration and an arsenal of digital payment solutions to help dethrone it.

The company’s soon-to-be-released mobile-phone application provides a one-stop platform for cashless transactions, digital money transfers and e-wallet solutions, while facilitating communications with features such as built-in messaging and video chat.

Tomas Pokorny, CEO of Pi Pay, said the platform is targeting young, internet-savvy Cambodians in the 17-30 age range in a bid to become the local equivalent of regional e-payment giants WeChat and Alipay.

“If you look at the Cambodian market you see a lot of telcos, banks, microfinance institutions and money transfer companies trying to handle remittances, but what you don’t see is a company that fully consolidates everything into a third-party payment system,” he said.

More than 1,000 merchants are already equipped to accept Pi Pay payments since the platform’s beta release in May. A full set of features will be launched next month, including QR code payments and the ability to split payments between different users.

Pokorny noted that work is still needed in order to get large numbers of users to adopt digital solutions, but signs already show that it is a growing area of interest, he said.

“The market is not there fully and not 100 percent ready for cashless, but then you think how many new startups, food platforms, online shopping platforms and payment platforms are coming up, it is a sign that the market is growing,” he said. “The good thing for us is that there are a lot of players already on the market who are educating the market.”

He explained that a large part of Pi Pay’s strategy was to evolve in the market through partnerships with other local players. The company has already announced that it is working with ABA Bank and PayGo to accept and facilitate transactions that utilise the Pi Pay platform, while it has opened the door to partner with other third party payment (TPP) processors in order to help develop the cashless economy.

“We want to build a Cambodian cashless infrastructure and rather than compete for remittances or compete for merchant payments, we want to be there holding hands with other players, even though they are seemingly our competitors,” Pokorny said. “I believe the Cambodian market needs partnerships.”

Pi Pay has the backing to succeed. The company is a subsidiary of Anco Group, a local conglomerate headed by businessman Rithy Samnang, the son-in-law of prominent tycoon and ruling-party Senator Kok An. Its shareholders include Singaporean businessmen, while Malaysia’s CIMB Bank acts as the custodian of the firm’s trust account.

Bun Yin, CEO of CIMB Bank Cambodia, said his parent bank has launched its own cashless systems in other regional markets, but the Cambodian branch sees its partnership with Pi Pay as an effective way to implement those solutions locally.

“Today, there are more people with Facebook accounts than banking accounts, and we believe that it is a matter of time before the adoption of digital channels converges with financial services,” he said.

“Pi Pay has taken the bold step of being the first TPP in Cambodia to invest substantially in creating an end-to-end digital payments ecosystem. If they succeed in catalysing the growth of digital payments volumes, they stand to gain a significant first-mover advantage.”

Yin noted that there have been difficulties in the past to convince both consumers and businesses to move away from cash payments into the lesser known territory of digital transactions, a process that needs to occur on both sides of the equation simultaneously, he said.

“In order to increase adoption levels [of digital payments] meaningfully, both consumers who use digital payments and merchants who accept them have to increase in tandem,” he said. “So far, the approach has been to wait-and-see on both sides, so the ecosystem has yet to gain momentum and reach the critical mass required to start a ‘chain reaction’.”

Chris McCarthy, CEO of marketing firm Mango Tango, noted that younger generations will be the ones driving the adoption of new payment innovations. He added that making sure merchants have the knowledge and understanding to implement these new systems will be a major key to success.

“It does seem like younger people are using payment systems more and more, which is a positive sign,” he said. “Somebody is going to get it [digital payments] right, and maybe it will be Pi Pay.”