Payment, FinTech, InsureTech & +ve Finclusion need by each ASEAN Market - Cambodia.

In this next series of articles for ASEAN, we will go into each market and answer 4 key questions to get insights into how a market is positioned for payments today and what the next big things are in FinTech & InsureTech.

So lets get going with Cambodia!

1. What is the best Payment app in Cambodia

2. What is the next big thing in FinTech in Cambodia

3. What is the next big thing for InsureTech in Cambodia

4. What does the Cambodia market need to improve Financial Inclusion and foster Wealth growth.

Exec Summary

• Best Payment App: Bakong is the best payment app due to its widespread adoption, blockchain-based security, and national support, making it ideal for both urban and rural users. For those prioritizing agent-supported services, Wing Money App is a strong alternative. Check user reviews on Google Play/App Store or X for the latest feedback on usability.
• Next Big Thing in FinTech: AI-driven financial services, especially facial recognition payments and credit scoring, will lead Cambodia’s FinTech evolution, supported by cross-border payment advancements. Robust cybersecurity and consumer education are essential to ensure adoption and trust.
• Next Big Thing in InsureTech: Mobile-based micro-insurance, supported by AI and telecom-bank partnerships, is the most promising InsureTech trend. Success hinges on improving digital literacy and regulatory support for innovative products.
• Needs for Financial Inclusion and Wealth Growth: Cambodia needs interoperable digital platforms, enhanced literacy, and affordable products to improve inclusion. For wealth growth, SME financing, digital investments, and regulatory reforms are key, but addressing infrastructure and trust gaps is essential.

The answers for the curious cats and data dawgs.........

Best Payment App in the Cambodia Market

The best payment app in Cambodia depends on factors such as market reach, usability, merchant acceptance, and accessibility for the unbanked. Bakong, developed by the National Bank of Cambodia (NBC), stands out due to its interoperability, widespread adoption (8.5 million users), and support for QR code payments across 3.3 million merchants. Other notable apps include Wing Money App, Pi Pay, TrueMoney, and ABA Mobile, but Bakong’s blockchain-based infrastructure and national backing make it the leading choice

• Bakong: Launched in 2020 by the NBC in collaboration with Soramitsu, Bakong is a blockchain-based payment system designed to promote financial inclusion and cashless transactions. It has 8.5 million users and has facilitated $15 billion in transactions, offering QR code payments domestically and regionally. The Bakong Tourists app extends its functionality to international visitors, covering 3.3 million merchants. Its interoperability with member institutions and low-cost transactions make it highly accessible, especially for the unbanked.
• Wing Money App: Operated by Wing Bank, this app is a pioneer in mobile banking, serving nearly 10 million annual users in a population of 17 million. Its agent-led model (Wing Cash Xpress) supports over-the-counter transactions, making it ideal for rural and unbanked users. It offers services like money transfers, bill payments, and remittances via partners like MoneyGram. Its API-driven platform (200 APIs) enhances integration with other services, but its agent-heavy approach may limit full digital adoption.
• Pi Pay: A cashless payment platform, Pi Pay integrates merchant payments with lifestyle features like chat and maps. It’s popular in urban areas for its innovative approach but has less rural penetration compared to Bakong or Wing. Its focus on e-commerce and retail partnerships makes it appealing for tech-savvy users.
• TrueMoney: A telecom-led mobile payment provider, TrueMoney targets the unbanked through its agent network and POS terminals. It supports money transfers, bill payments, and mobile top-ups, but its market share is smaller than Bakong or Wing. Its strength lies in accessibility for non-bank account holders.
• ABA Mobile: Offered by ABA Bank, this app provides 24/7 account access, QR code payments, and augmented reality features. It’s popular among urban users with bank accounts but less focused on the unbanked compared to Bakong or Wing. Its API integrations with ERP systems enhance business use cases.
• Others: Apps like Ly Hour Pay Pro (focused on domestic transfers and bill payments with 1,000 agents), SmartLuy, and PayGo offer similar services but have smaller footprints. They cater to niche needs but lack the scale of Bakong or Wing.

Critical Perspective: Bakong’s government backing and interoperability give it an edge, especially for cross-border payments and rural inclusion. However, its reliance on institutional partnerships may limit flexibility for some users. Wing’s agent network ensures accessibility but indicates slower adoption of self-service digital transactions, with only a gradual shift away from agent-led usage. Pi Pay and TrueMoney are innovative but struggle with scale, while ABA Mobile is more suited for banked, urban users. Cambodia’s high mobile penetration (124%) supports app adoption, but low digital literacy and trust issues remain barriers.

Next Big Thing in FinTech in Cambodia

The next big thing in Cambodia’s FinTech sector is likely to be AI-driven financial services, including facial recognition payments, AI-powered credit scoring, and personalized digital banking. These innovations, supported by the Cambodia Financial Technology Development Policy 2023–2028, aim to enhance financial inclusion, improve efficiency, and foster regional integration through cross-border payment systems.

• Facial Recognition Payments: At the 2024 CamTech Summit, NBC Governor Chea Serey announced plans for a facial recognition payment system, allowing transactions via a camera scan. This technology, part of the Financial Technology Development Policy 2023–2028, leverages Cambodia’s high mobile penetration (124%) to simplify payments, particularly for the unbanked, and aligns with global trends in biometric payments.
• AI and Machine Learning for Credit Scoring: AI-driven tools like Credit Bureau Cambodia’s K-Score use alternative data (e.g., mobile payment histories) to assess creditworthiness for the 41% of adults without formal financial access. These tools enable microloans for SMEs and individuals, reducing reliance on high-interest microfinance (18% rate cap). Machine learning and big data analytics enhance risk assessment and loan affordability.
• Cross-Border Payment Systems: Cambodia is advancing regional payment integration through partnerships with ASEAN neighbors (e.g., Thailand, Philippines, Vietnam). The NBC’s MoU with Bangko Sentral ng Pilipinas and cross-border QR code payments with Thailand (launched via Bakong) facilitate trade and remittances. Blockchain technology, as used in Bakong, supports secure, low-cost cross-border transactions, critical for Cambodia’s migrant workforce.
• Neobanks and Digital Lending: Online-only banks (neobanks) and digital lending platforms are emerging, with apps like Wing Bank offering loans from $20 to $50,000 without collateral. These solutions cater to SMEs and individuals, boosting financial inclusion and economic activity.

Critical Perspective: AI-driven services, particularly facial recognition, are innovative but face challenges like cybersecurity risks and low digital literacy (only 68% internet penetration). Cross-border systems are promising but depend on stable regional partnerships, which could be disrupted by geopolitical tensions. Neobanks and digital lending are transformative, but high microfinance debt and reported predatory collection practices (e.g., Nikkei Asia reports of debtor suicides) highlight the need for regulatory oversight. The NBC’s proactive policies are a strength, but political stability and infrastructure gaps (e.g., rural connectivity) could slow progress.

Next Big Thing in InsureTech in Cambodia

The next big thing in Cambodia’s InsureTech sector is mobile-based micro-insurance, leveraging platforms like BIMA Cambodia to deliver affordable, accessible insurance products to the unbanked and underbanked. These solutions, integrated with mobile payment apps and supported by AI for claims processing, align with Cambodia’s push for financial inclusion.

• Mobile-Based Micro-Insurance: BIMA Cambodia uses mobile technology to offer low-cost health and accident insurance, targeting the 41% of adults without formal financial services. Integrated with mobile payment apps like Wing or TrueMoney, micro-insurance allows premium payments via e-wallets, making it accessible in rural areas. These products cover small-scale risks (e.g., medical emergencies, crop failures), addressing the needs of low-income households.
• AI-Driven Claims Processing: AI and machine learning can streamline claims processing and risk assessment, reducing costs and improving accessibility. For example, alternative data (e.g., mobile usage patterns) can be used to tailor insurance products, similar to Credit Bureau Cambodia’s K-Score for loans. This is particularly relevant for Cambodia’s young, tech-savvy population (median age 27).
• Partnerships with Telecoms and Banks: Collaborations between insurers, telecoms (e.g., Smart Axiata), and banks (e.g., Wing Bank) enable scalable distribution of insurance products. For instance, Wing’s API platform could integrate insurance offerings, while telecom-led apps like TrueMoney can bundle insurance with bill payments.
• Regulatory Support: The NBC’s Financial Technology Development Policy 2023–2028 encourages InsureTech innovation, with a focus on financial inclusion. Regulatory frameworks for digital insurance are evolving, potentially supporting Takaful (Islamic insurance) for Cambodia’s Muslim minority, though this remains a niche area.

Critical Perspective: Micro-insurance is well-suited to Cambodia’s rural and unbanked population, but low financial literacy and trust in digital systems pose barriers. AI-driven solutions require stable internet and data privacy measures, which are underdeveloped in rural areas. The insurance market is nascent, and high microfinance debt may limit disposable income for premiums. Partnerships are key, but scalability depends on overcoming infrastructure gaps and cultural resistance to insurance.

What Cambodia Needs to Improve Financial Inclusion and Net Wealth Growth

Cambodia’s market needs enhanced digital infrastructure, improved financial literacy, interoperable payment systems, and affordable financial products like microloans and micro-insurance to improve financial inclusion. For wealth growth, fostering SME financing, digital investment platforms, and regulatory reforms to curb predatory lending are critical. Addressing infrastructure gaps, cybersecurity risks, and trust issues will ensure sustainable progress.

For Financial Inclusion:

• Strengthen Digital Infrastructure: Cambodia’s 124% mobile penetration and 68% internet penetration provide a strong foundation, but rural connectivity and electricity access remain limited. Investments in 3G/4G networks and power infrastructure are essential to expand digital financial services.
• Promote Financial Literacy: Only 59% of adults have formal financial access, with trust and self-confidence barriers among the unbanked. Programs like the UN Capital Development Fund’s initiatives to educate young adults (median age 27) should be scaled to boost adoption of mobile apps like Bakong.
• Interoperable Payment Systems: Bakong’s blockchain-based interoperability is a model for unifying bank and non-bank platforms (e.g., Wing, Pi Pay). Expanding systems like Retail Pay and FAST Payment System will reduce transaction costs and improve access for rural users.
• Affordable Financial Products: Microloans (e.g., Wing Bank’s $20–$50,000 loans) and micro-insurance (e.g., BIMA Cambodia) target the unbanked and SMEs. These products need wider distribution through agent networks and mobile apps to reach rural areas.
• Regulatory Support: The NBC’s Financial Technology Development Policy 2023–2028 and National Financial Inclusion Strategy 2019–2025 provide a framework for innovation. Regulatory sandboxes and partnerships with the Cambodia Fintech Association (CAFT) can accelerate inclusive solutions.

For Wealth Growth:

• SME Financing: SMEs drive Cambodia’s economy (5.8% GDP growth projected for 2024), but high microfinance interest rates (18% cap) and predatory practices limit growth. AI-driven platforms like Credit Bureau Cambodia’s K-Score can improve loan access for SMEs, fostering entrepreneurship.
• Digital Investment Platforms: Crowdfunding platforms like TosFUND and neobanks offering investment products can democratize wealth-building. Integrating these with e-commerce (e.g., Tesjor Wallet) can boost SME revenues.
• Curb Predatory Lending: Microfinance’s high non-interest fees and aggressive collection tactics (e.g., reported debtor suicides) drain household wealth. The Association of Banks in Cambodia (ABC) and Cambodia Microfinance Association (CMA) must enforce regulations to protect borrowers.
• Public-Private Partnerships: Collaborations between the NBC, CAFT, and international partners (e.g., Huawei for cybersecurity, ADB for data infrastructure) can drive innovation. Initiatives like the CamTech Summit encourage private-sector investment in fintech.
• Skill Development: Building fintech and data analytics skills through programs like the World Bank’s Programmatic Advisory Services will support a tech-savvy workforce, attracting investment and fostering wealth creation.

Challenges to Address:

• Digital Divide: Rural areas lag in internet and electricity access, limiting digital financial services.
• Cybersecurity Risks: Fintech growth increases cybercrime risks, requiring robust regulations and consumer protection.
• Trust and Literacy: Low confidence in digital systems and financial products hinders adoption, particularly among the unbanked.
• Microfinance Debt: Overreliance on microfinance with high fees threatens financial stability and inclusion goals.
• Economic Risks: Global demand slowdowns and domestic non-performing loans could impact fintech scalability.

Critical Perspective: Cambodia’s fintech progress is impressive, with e-wallet accounts rising from 2 million (2017) to 19.5 million (2022). However, the digital divide and microfinance debt crisis (reported by Nikkei Asia) pose significant risks. The NBC’s policies are forward-thinking, but political stability and rural infrastructure are critical for success. Wealth growth requires addressing systemic issues like predatory lending, which fintech alone cannot solve without regulatory enforcement.