While other ASEAN countries have made significant progress in digital transformation, Cambodia’s recent rapid development has allowed it to leapfrog traditional stages of technological evolution. By embracing innovation and digital solutions, Cambodia has rapidly digitalised key sectors such as finance, e-commerce, and e-governance. 

This accelerated digitalisation can be attributed to Cambodia’s young and tech-savvy population, their willingness to embrace new technologies, leading private sector actors such as leading telecommunications companies like Cellcard and finance pioneers such as Phillip Bank, not to mention the government’s proactive support for digital initiatives.

In this article, we discuss why Cambodia’s ability to bypass legacy systems and adopt cutting-edge technologies has positioned it as a future frontrunner in the region, creating a favourable environment for foreign investors looking to tap into a rapidly evolving digital economy. For more in-market news view our market information resources on our website or get in touch with our expert team.

When did Cambodia’s digitalisation begin?

Cambodia is a small country with a young population, which has seen it quickly become a regional pioneer in fintech adoption. In 2016, when more advanced countries were still grappling with the introduction of e-payments, food deliveries, and ride hailing apps, Cambodia had already embraced these technologies.

There are a number of factors that have contributed to Cambodia’s early adoption of fintech. First, the country has a young and tech-savvy population that is open to new technologies. Second, the government has been supportive of fintech adoption, providing financial incentives to businesses that implement these technologies. Third, the cost of implementing fintech solutions is relatively low in Cambodia, making it an affordable option for businesses of all sizes.

The adoption of fintech has had a number of benefits for Cambodia. For people, fintech has made it easier and more convenient to make payments, get food delivered, and hail a ride. For businesses, fintech has helped to reduce costs, improve efficiency, and reach new customers.

Here are some specific examples of how Cambodia has been ahead of the curve in fintech adoption:

  • E-payments: Cambodia was one of the first countries in Southeast Asia to adopt e-payments. In 2016, there were already a number of e-payment providers operating in Cambodia, including Wing, ABA Pay, and Pi Pay. These providers offer a variety of e-payment services, such as mobile banking, online payments, and QR code payments.
  • Food deliveries: Food delivery apps like Foodpanda and Nham24 were launched in Cambodia in 2015. These apps allow users to order food from a variety of restaurants and have it delivered to their homes or offices. Food delivery apps have been very popular in Cambodia, and they have helped to make it easier and more convenient for people to get food delivered. (source)
  • Ride hailing apps: These apps allow users to book a ride with a driver who is nearby. Ride hailing apps have been very popular in Cambodia, and they have helped to make it easier and more convenient for people and the movement of goods around the country.

Cambodia’s early adoption of fintech has put the country in a strong position to capitalize on the growing global fintech market. The country has a young and tech-savvy population, a supportive government, and a low cost of doing business. These factors make Cambodia an attractive destination for fintech startups and investors.

Where has Cambodia’s digitalisation had such success?

Cambodia’s digitalisation has increased exceptionally in recent years such as in the following examples:

  • Mobile banking: Mobile banking has become increasingly popular in Cambodia in recent years. In 2021, there were over 10 million mobile banking users in Cambodia, accounting for over 60% of the adult population. Mobile banking has made it easier for people to access financial services, even in rural areas. (source)
  • E-commerce: E-commerce is also growing rapidly in Cambodia. In 2022, the e-commerce market in Cambodia was worth just under $1 billion, and is expected to grow to well over by 2025. E-commerce has made it easier for people to shop online, and it has also created new opportunities for businesses. (source)
  • Online education: Online education has also become increasingly popular in Cambodia in recent years. Online education has made it possible for people to access quality education, even if they live in rural areas.
  • Government services: The government of Cambodia is also making progress in digitizing government services. In 2021, the government launched an online platform that allows citizens to access a variety of government services, such as paying taxes and applying for passports.
  • Bakong. The digital payments system is helping Cambodian people and businesses make international payments using the financial technology, creating more opportunities (source).

What is a successful example of Cambodia’s digitalisation?

QR-code payment systems have been a huge success in Cambodia and quickly adopted for personal and business needs. Today, QR-code payment has become ubiquitous so much that most hardly use cash except for tips and small miscellaneous payments or in less urbanized places. Also, QR-code payments linked to local banks and FIs which can also be used in Thailand, Vietnam, South Korea and soon China, delivering further benefit to Cambodian businesses. (source)

The rapid adoption of digital financial services and mobile banking is due to the growing demand for higher levels of service and better digital tools. From tuk tuk drivers to shopping malls, mobile payments by scanning QR codes or via in-app transfers are now the most common means of transacting throughout the country; closely followed by fully digital account opening and micro-loan applications. (source).

There are a number of factors that have contributed to the rapid adoption of QR code payments in Cambodia. First, the country has a young and tech-savvy population that is open to new payment methods. Second, the government has been supportive of the adoption of QR code payments, providing financial incentives to businesses that implement the technology. Third, the cost of implementing QR code payments is relatively low, making it an affordable option for businesses of all sizes.

The adoption of QR code payments has a number of benefits for both people and businesses. For people, QR code payments are a convenient and secure way to make payments. They can be used to pay for goods and services at a variety of merchants, including restaurants, shops, and even street vendors. QR code payments are also more secure than cash or credit cards, as they do not require the exchange of physical cards or cash.

For businesses, QR code payments offer a number of advantages. They can help to reduce transaction fees, improve customer satisfaction, and increase sales. QR code payments are also a more efficient way to process payments, as they do not require manual data entry.

The rapid adoption of QR code payments in Cambodia is a positive development for the country. It is a sign of the country’s growing acceptance of technology and its commitment to a cashless society. QR code payments are a convenient, secure, and efficient way to make payments, and they are becoming increasingly popular in Cambodia.

What are the reasons why Cambodia has so rapidly realised cross sector digitalisation?

Cambodia has been successful in leapfrogging digitalisation due to it being relatively late in its development. The World Bank has praised Cambodia’s digitalisation and the way it has leapfrogged traditional systems in embracing mobile payment platforms in banking. This has meant that Cambodians have had access to modern mobile financial services, providing them with convenient and secure options for conducting transactions, instilling trust from consumers and investors alike. (Source). 

How has the government helped support Cambodia’s digitalisation?

The Cambodian government has implemented various policies and initiatives to support the growth of the digital economy. Some of these are listed below:

  • The National Digital Economy Policy: The National Digital Economy Policy was launched in 2016. The policy aims to make Cambodia a digital-friendly country by 2025. The policy includes a number of initiatives to promote digitalization, such as improving the country’s internet infrastructure and developing a digital workforce.
  • The National e-Government Master Plan: The National e-Government Master Plan was launched in 2017. The plan aims to make government services more accessible and efficient through digitalization. The plan includes a number of initiatives to digitalise government services, such as creating an online platform for citizens to access government services and developing a mobile app for government services.
  • The Digital Cambodia Initiative: The Digital Cambodia Initiative was launched in 2018. The initiative aims to promote digitalization in Cambodia by providing financial support to businesses and individuals. The initiative has provided funding for a number of projects, such as the development of an online education platform and the creation of a digital payment system.
  • The establishment of the Cambodia ICT Federation (CICT) and the Cambodia IT Development Fund (CIDF) demonstrates the government’s commitment to fostering a favorable environment for the tech sector (Source)

How has Cambodia’s digitalisation been so rapidly adopted by its population?

E-commerce has experienced significant growth in Cambodia, driven by the increasing adoption of digital platforms. Reputable online marketplaces such as Nham24 and Jumia Cambodia have emerged as popular platforms for both local businesses and consumers, facilitating seamless online transactions and expanding market reach (Source).

Also, Cambodia’s young population has demonstrated a keen interest and proficiency in technology. The Global Skills Index by Coursera ranks Cambodia among the top countries with the highest proficiency in technology skills, reflecting the readiness of its workforce to embrace digital tools and contribute to the country’s digital economy (Source)

Which companies have been instrumental in Cambodia’s digitalisation?

Cellcard and Phillip Bank have been instrumental in helping digitalise Cambodia through their businesses in a number of ways. For instance, Cellcard is:

  • The longest serving only Khmer owned mobile operator in Cambodia launched mobile banking services back in 2010 (source). These services have made it easier for people to access financial services, even in rural areas.
  • Is a major player in the development of the e-commerce market in Cambodia. The company’s mobile payment platform, Wing, is one of the most popular payment methods for online transactions in the country (source)
  • Has also invested in online education and multiple CSR programmes, which can be found on their website. Click here for more information.

Phillip Bank has also been a major player in the digitalization of Cambodia. The bank has invested in a number of digital initiatives, including:

  • Online banking: Phillip Bank offers a comprehensive online banking platform that allows customers to manage their accounts, transfer funds, and pay bills online.
  • Mobile banking: Phillip Bank also offers a mobile banking app that allows customers to access their accounts and make transactions on the go.
  • Digital payments: Phillip Bank is a leading provider of digital payments in Cambodia. (source)

Phillip Bank said, “As for the banking sector, we can see a significant preference toward digital banking.  Digital banking allows customers to access banking products via online and electronic platforms, either internet banking or mobile banking. Digital banking products include mobile banking apps, KHQR, E-savings accounts, virtual debit and credit cards such as Mastercard, payment gateways, and loans.The value-added benefits to customers include convenience, an enhanced banking experience, faster service, security, and time-savings.”

“A good example of this is the emerging trend of QR code payment across the country. In this case, you only need a few seconds to utilize the Phillip Bank Mobile App to complete the QR code transaction that is built into the app. And you can use your Phillip Mobile App to scan any other bank’s KHQR code to pay! Money transferring is also easy where the transaction can also be done via the app with just a few taps of your fingertips.”

“If this is new information to you and you want to get started, you can download the Phillip Bank Mobile App and set up your bank account within 5 minutes. Once it is completed, you will have access to all the features mentioned above.”

The digital initiatives of Cellcard and Phillip Bank have helped to make Cambodia a more digitalised country. These companies have made it easier for people to access financial services, shop online, and interact with the government online. As a result, they have played a significant role in the country’s economic development.

In comparison to other regional countries, Cambodia’s digitalisation – given its relatively recent exponential growth in development – is quite impressive. Here are some factors to consider:

How does Cambodia’s digitalisation compare with regional countries?

  • Cambodia has the highest mobile banking penetration rate in Southeast Asia, with over 60% of the adult population using mobile banking services. This is significantly higher than the rates in neighboring countries, such as Thailand (30%) and Vietnam (20%).
  • E-commerce: The e-commerce market in Cambodia is also growing rapidly, with a value of just under $1 billion in 2022. This is still small compared to the e-commerce markets in neighboring countries, such as Thailand ($35 billion) and Vietnam ($15 billion). However, the Cambodian e-commerce market is growing at a faster rate than the markets in these countries.
  • Government services: The government of Cambodia is also making progress in digitalising government services. In 2021, the government launched an online platform that allows citizens to access a variety of government services, such as paying taxes and applying for passports. 
  • Bakong. The digital payments system is helping Cambodian people and businesses make international payments using financial technology, creating more opportunities (source).

What are some investment opportunities in terms of Cambodia’s digitalisation?

Cambodia’s digitalisation offers diverse investment opportunities across multiple sectors and has been progressing rapidly, opening up several investment opportunities in various sectors. Here are some examples:

  • E-commerce Platforms: Cambodia’s e-commerce industry is growing steadily, presenting opportunities for investment in online marketplaces, logistics, payment systems, and last-mile delivery services. Examples of existing e-commerce platforms in Cambodia include Nham24, Little Fashion, and Joonaak Delivery.
  • Fintech and Digital Payments: With the increasing adoption of digital payments and mobile banking, investing in fintech solutions, mobile wallets, and payment gateways can be lucrative. Examples of digital payment platforms in Cambodia include Pi Pay, Wing, and ABA Mobile. Cambodian-based Pi Pay is an example of a new system securing significant investments from international investors to expand their digital payment services (Source). 
  • Digital Infrastructure: Investing in the development of digital infrastructure, such as internet connectivity, data centers, and cloud services, is crucial to support Cambodia’s digitalization. Companies like Ezecom and Telcotech provide internet and telecommunication services in the country.
  • Online Education: The demand for online education platforms and e-learning solutions is growing in Cambodia. Investing in online tutoring platforms, educational apps, or content creation for digital learning can be a promising opportunity. Find out more here.
  • Mobile Apps and Software Development: Investing in mobile app development, software solutions, and IT services can cater to the increasing demand for digital tools and services. Developing applications for sectors like healthcare, tourism, and transportation can be particularly beneficial.
  • The development of smart city initiatives, such as the partnership between the Cambodian government and South Korea’s NXC Corporation, showcases the potential for foreign investors to contribute to Cambodia’s urban transformation (Source).

Cambodia’s digitalisation effort offers many benefits for potential investors, and the supportive environment created by the government.

What are the challenges facing Cambodia’s digitalisation?

Cambodia has made significant progress in digitalization in recent years. However, there are still a number of challenges that need to be addressed in order to fully realize the potential of digital technologies.

  • Low financial and digital literacy

One of the biggest challenges to digitalization in Cambodia is the low level of financial and digital literacy. Many people in Cambodia, especially those in rural areas, do not have the knowledge or skills to use digital banking services. This can make it difficult for them to access financial services and participate in the digital economy.

  • Cybersecurity threats

Another challenge to digitalization in Cambodia is the threat of cybersecurity. As more and more people use digital banking services, there is an increased risk of fraud and cyberattacks. This is a serious concern, as it could undermine public trust in digital banking and hinder the growth of the digital economy.

  • Over-saturated market

The mobile banking market in Cambodia is becoming increasingly crowded. There are now dozens of different providers offering similar products and services. This can make it difficult for consumers to choose the right provider for their needs.

Further investment in Cambodia will help mitigate these challenges and further strengthen the effort towards digitalisation which the Kingdom is so hungry to achieve. To learn more about making smart investments in surrounding Cambodia’s digtalisation get in touch with the in-market experts Aquarii today.