Cambodia’s crowded payments space may be ripe for consolidation

Phnom Penh, Cambodia. Photo by Mark on Unsplash

The digital payments space in Cambodia – where the cash-to-online transition is still at an early stage –  is expected to witness a wave of consolidation as there is room for only a few players to emerge as long-term winners.

The Southeast Asian country, with a population of nearly 16.8 million, has over 20 digital payments firms servicing the market.

“At least three-five mergers and acquisitions in the past couple of years have been completed,” according to Cambodia Association of Finance and Technology secretary-general and Pi Pay CEO Tomas Pokorny. “We expect that further consolidations and M&A activities are necessary for the payment space,” he said, adding, the market was “highly fragmented, competitive and crowded.”

Cambodian mobile payment app Pi Pay itself completed its merger with Smartluy Plc, a subsidiary of a Malaysia-owned Smart Axiata Co Ltd, a telecom service provider in Cambodia, after receiving approval from the National Bank of Cambodia (NBC) and the Ministry of Commerce in July last year.

Meanwhile, in 2018, Malaysia’s payment service provider GHL Systems Bhd acquired Speed Pay Plc for $2.04 million to expand its footprint in Cambodia. Other deals in the financial services space include Pay&Go merging with Edeel and Japan’s SBI Holdings acquiring a 70 per cent stake in Cambodian microfinance provider Ly Hour Microfinance Institution.

As of 2019, Cambodia has 21 payment service institutions (PSIs) operating with 27,974 payment and settlement agents and 15,037 merchant locations. The country’s fintech market is currently dominated by mobile wallets and payment providers.

These are represented by startups such as Clik, a payment gateway and aggregator; Morakot, a developer and provider of financial software; BanhJi, an online accounting platform; Pi Pay, a mobile payment app; BongLoy, an API-based payment solution; and SmartLuy, a mobile payment app.

According to Pokorny, as the market matures, the competition will stiffen as well as partnerships will develop towards more strategic structures, such as mergers and so on.

Pokorny told DealStreetAsia that the emerging winners in the payments space would be those that develop a strong strategic partnership between financial services and technology companies.

Investment advisory firm Mekong Strategic Partners said in its report, “We expect M&A activities to accelerate payment platforms look for synergies across the value chain and strategic partners with adequate resources to compete for the attractive values of the market. Given the recent interest, we expect some level of cross-border acquisition from abroad, looking to get exposure to the growing Cambodian market.”

Expand Table

Name of playerYear of establishmentMain servicesFund raised/M&A
Clik2016Payment aggregator enabling consumer payments from cards, wallets and bank accounts while enabling merchants to accept such payments.$3.7 million seed round in August 2020.
Wing2008Providing financial inclusion via mobile banking services to the unbanked and under-banked
PayGo2015PayGo provides payment collection and accepts payments through Payment Kiosks, POS terminals, Desktop/Mobile Apps and I-Banking
Pi Pay 2016Pi Pay incorporates merchant payment services with a range of social and lifestyle features including Chat, Maps and Friend Finder, and a growing network of retail partnersIn 2020, Pi Pay merged with SmartLuy to become one of Cambodia's leading payment platforms
AMK Money Transfer2016Send and receive money anywhere in Cambodia.
SmartLuy2016Transfer money, pay utility and other bills and to do mobile top up to any operators
Asia Wei Luy 2016Transfer, deposit and withdraw money between each other and with anyone in C ambodia, via mobile phone.
Ly Hour Pay Pro 2016Domestic money-transfer service SBI Holdings acquired 70% stake in Ly Hour Pay in 2019.
Gmoney Trans2016Phone-based money transfer
BongLoy2014API for card issuance and digital payment infrastructure.
eMoney2015Financial and banking to customers who are the mobile subscribers
Speed Pay2017Money transfers, bill payments, request for digital money, splitting bills, sending money between Speed Pay agentsMalaysia’s GHL Systems Bhd acquires a 51% stake in Cambodia e-payment company for US$2.4 million in 2018.

High mobile penetration but low digital money adoption

The Kingdom’s digital payment market was pegged at $2.21 billion in 2019 (a 37% increase from 2018), with the value in 2020 believed to be around $3.46 billion, per Mekong Strategic Partners estimates in late 2019.

The country has one of the highest mobile penetration rates in the world, with 20.8 million mobile connections, or 124 per cent of the population, according to MSP.

But, the transition from cash to digital money is still in its early stages in Cambodia.

ADB estimates that the country’s regulatory initiatives to support digital finance applications could generate more than $2 billion in additional electronic payment flows.

“We estimate that countrywide only 10-15% of payments are done digitally, which means that there is a very significant opportunity to digitalise these payments in very short order,” Clik co-founder and CEO Matthew Tippetts told DealStreetAsia.

Cambodian fintech startup Clik, which raised a $3.7-million seed funding round in August, plans to expand to the Mekong region in 2021, starting with Myanmar and Vietnam. Clik is also in the process of raising a Series A funding round, the CEO said in an email interaction.

Clik raised the seed round led by European B2B payment firm Openway and Poems Pte Ltd, the investment holding company of Phillip Capital, a Singapore-based firm with over $35 billion under management.

Founded in 2016, Clik is Cambodia’s first independent mPOS and SoftPOS merchant acquirer, enabling consumer payments from cards, wallets and bank accounts while enabling merchants to accept such payments. Clik has also developed its own e-KYC solution.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.