Cambodia’s Cards and Payments Industry: Emerging Opportunities, Trends, Size, Drivers, Strategies, Products and Competitive Landscape, New Report Launched

The Cambodian cards and payments industry, including debit and credit cards, registered positive growth during the review period, recording a compound annual growth rate (CAGR) of 26.31%, and increasing from 464,047 cards in circulation in 2009 to 1.2 million by the end of 2013. In terms of transaction value, payment cards valued KHR3.7 trillion (US$915.2 million) in 2013, after registering a review-period CAGR of 30.89%. Favorable economic conditions, improved banking infrastructure, new products offered by banks, and growth in card payments at point of sale (POS) terminals all led to growth in card payments.

The average transaction value (ATV) in Cambodia was US$65.6, ranking 15th in Asia-Pacific in 2013. China recorded the highest ATV, with US$302.4, while New Zealand ranked lowest in Asia-Pacific with an ATV of US$46.3. Cambodia had the lowest card penetration in Asia-Pacific, with 0.1, and ranked 12th in Asia-Pacific in terms of frequency of use of payment cards, with 11.8 transactions per card. New Zealand recorded the highest frequency, with 146.1 transactions per card, followed by Australia with 96.6, South Korea with 44.7, and Singapore with 36.0.

In terms of transaction value, debit cards were the favored payment card in Cambodia in 2013, accounting for 96.9% of card payments, while credit cards accounted for 3.1%. A similar trend is expected over the forecast period. Debit cards are offered to everyone who opens a personal bank account, and banks are promoting these accounts to attract customers. ANZ Royal Bank, for instance, is promoting the Convenience Plus account, offering customers a Royal Debit Card with free international access and money transfer facility. These cards are issued free of charge and can be used to pay utility bills, although they are mostly used at ATMs to withdraw cash, rather than at POS terminals; ATMs accounted for 97.6% of debit card transactions in 2013, while POS terminals accounted for just 2.4%, in terms of transaction volume.

Banks are also taking initiatives to develop credit cards, and are conducting consumer awareness campaigns in association with Visa. Banks are aiming to ensure that consumers are ready to use credit cards by educating them on how to manage personal finances, and benefit from credit cards without getting into debt. In November 2013, Acleda Bank has launched its first Acleda Visa credit card, while Cambodian Bank has launched both Visa and Master Platinum cards. Other banks such as ANZ Royal Bank and CUBC offer added benefits, such as discounts on airport lounges and hotels.

As card transactions increase, so does card fraud, and banks are issuing cards with EMV technology to increase transaction security. CUBC Bank, for instance, implemented EMV security standards by installing ATMs that accept EMV-based transactions for all Visa-branded cards. In March 2014, Data Card Group collaborated with Visco (Cambodia) and Omega Computer Corporation to conduct EMV seminars in Cambodia. The seminar aimed educating banks and customers about the importance of EMV cards, risk management, benefits, and considerations during migration and verification security when authenticating debit and credit transactions at POS terminals and ATMs.

The report provides top-level market analysis, information and insights into Cambodia’s cards and payments industry, including:

  • Current and forecast values for each category of Cambodia’s cards and payments industry, including debit cards, credit cards and prepaid cards
  • Comprehensive analysis of the industry’s market attractiveness and future growth areas
  • Analysis of various market drivers and regulations governing Cambodia’s cards and payments industry
  • Detailed analysis of marketing strategies adopted to sell debit, credit and prepaid cards used by banks and other institutions in the market
  • Comprehensive analysis of consumer attitudes and buying preferences for cards
  • The competitive landscape of Cambodia’s cards and payments industry

Scope

  • This report provides a comprehensive analysis of Cambodia’s cards and payments industry.
  • It provides current values for Cambodia’s cards and payments industry for 2013, and forecast figures for 2018.
  • It details the different economic, infrastructural and business drivers affecting Cambodia’s cards and payments industry.
  • It outlines the current regulatory framework in the industry.
  • It details the marketing strategies used by various banks and other institutions.
  • It profiles the major banks in Cambodia’s cards and payments industry.

Reasons to Buy

  • Make strategic business decisions using top-level historic and forecast market data related to Cambodia’s cards and payments industry and each market within it.
  • Understand the key market trends and growth opportunities in Cambodia’s cards and payments industry.
  • Assess the competitive dynamics in Cambodia’s cards and payments industry.
  • Gain insights in to the marketing strategies used to sell various card types in Cambodia.
  • Gain insights into key regulations governing Cambodia’s cards and payments industry.

Spanning over 73 pages, 53 Tables and 30 Figures “Cambodia’s Cards and Payments Industry: Emerging Opportunities, Trends, Size, Drivers, Strategies, Products and Competitive Landscape” report Covering Key Facts and Top Events, Executive Summary, Payment Instruments, Market Attractiveness and Future Prospects of Cards and Payments, Analysis of Cards and Payments Industry Drivers, Emerging Consumer Attitudes and Trends, Payment Cards, Debit Cards, Credit Cards, Commercial Cards, Regulations in the Cards and Payments Industry, Card Fraud Statistics, Card Issuers, Card Schemes, Prepaid Cards, Appendix. This report Covered 8 Companies – Acleda Bank Plc, ANZ Royal Bank Cambodia, Canadia Bank Plc, Cambodian Public Bank, Cathay United Bank, Union Commercial Bank, MasterCard, Visa.

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Cambodia Laos and Myanmar Business Forecast Report Q2 2014, New Report Launched

Cambodia’s political scene has taken a turn for the worse over recent months. The crackdown by the government on protesting garment workers poses a risk to the sector’s otherwise positive medium term outlook. Meanwhile, it also raises the stakes in the ongoing impasse between the ruling Cambodia People’s Party (CPP) and the opposition Cambodia National Rescue Party (CNRP), with the opposition CNRP becoming increasingly emboldened by their growing support base, and Hun Sen’s CPP facing a tough task in maintaining the country’s stable business environment. On the economic front, while the tourism industry continues to show promise, the construction sector is likely to suffer over the coming quarters as the nation’s credit boom winds down. The current lending boom is resembling that which came to a rapid end amid the global financial crisis, and we believe that the country’s hot real estate sector could be in for a rude awakening.

Laos –

Despite acknowledging that urgent fiscal reforms are needed, Vientiane has done little to alter its excessive spending patterns with the fiscal deficit widening substantially to 5.8% of GDP in FY2012/13 from 1.3% in the previous year. Public expenditures swelled as a result of a surge in the public sector wage bill owing to a rapid expansion in the civil servant headcount and substantial raises in civil service wages. Revenues, meanwhile, were hurt by a fall in mining income as commodity prices were subdued and gold production fell. We believe that fiscal reforms are likely to dominate Laos’ political scene as the government continues to struggle to arrest a deteriorating fiscal position. While we have highlighted that Vientiane has not been able to alter its profligate spending patterns, some quarters of the government appear resolute to curb public spending. We also highlight that concerns towards the human rights situation in Laos are on the rise and further repressive acts by the government runs the risk of reversing the solid economic progress that has been made over the years. Unless Vientiane starts to make significant headway, it is unlikely to reverse a continued deterioration in its fiscal position.

Myanmar-

Myanmar faces a key test of its nascent reform drive as suggestions for the amendment of its highly flawed constitution are set to be announced. Of particular interest will be the military (Tatmadaw)’s suggestions, which will be the culmination of a review process undertaken earlier in 2013. One of the key questions that may be answered is whether or not the military will agree to a smaller presence in the country’s parliament, where it currently holds a mandated 25% of seats. Additionally, the constitutional review may provide the answer as to whether or not venerable opposition leader Aung San Suu Kyi will be allowed to run for president in the upcoming 2015 general election, which would be a major step towards the legitimisation of the elections as a free and fair process. While Myanmar’s economic growth potential remains enormous, the country’s entire development story will likely hinge upon the government’s ability to maintain reform momentum through 2015’s elections and beyond.

Several critically important countries are facing tests in 2014 that could determine their political and economic evolution for years to come. Iran perhaps offers the greatest opportunity for positive change, while the biggest systemic risk among ‘pivotal’ states is the Korean Peninsula.

As Cambodia’s political deadlock continues, both the ruling Cambodia People’s Party (CPP) and the opposition Cambodia National Rescue Party (CNRP) have tough choices to make, which could determine whether the country reverts back to a one party state or democracy is strengthened as reforms are undertaken.

Cambodia’s long-term political outlook largely depends on the ruling Cambodian People’s Party (CPP)’s ability to address widespread corruption and income inequality, which have been fuelling public dissent against the government in recent years.

Cambodia’s credit boom continues to roll on, and now exceeds the one that preceded the economic slump in 2009 by many measures. Inflation pressures are rising, which could force the National Bank of Cambodia (NBC) to tighten liquidity to cool the credit boom.

Despite the heightened levels of social unrest in Cambodia’s major cities following the disputed election result in July 2013, tourism inflows have continued apace, growing at 18.0% in 2013. We expect to see double digit increases in the country’s crucial tourism industry in 2014 largely on the back of improved transport linkages.

Fiscal reforms are likely to dominate Laos’ political scene as the government continues to struggle to arrest a deteriorating fiscal position. While we have highlighted that Vientiane has not been able to alter its profligate spending patterns, some quarters of the government appear resolute to curb public spending.

Laos’ long-term political outlook will depend heavily on how well the country balances the need to spur economic growth to achieve its millennium development goals and the need to address widespread corruption and dissent against the government.

Despite acknowledging that urgent fiscal reforms are needed, Vientiane has done little to alter its excessive spending patterns with the fiscal deficit widening substantially to 5.8% of GDP in FY2012/13 from 1.3% in the previous year. Public expenditures swelled as a result of a surge in the public sector wage bill owing to a rapid expansion in the civil servant headcount and substantial raises in civil service wages.

While the Lao government is reviewing a ban on new mining conce ssions that had been due to last until 2015, our sombre outlook on frontier mining continues to suggest that the country’s mining sector is set to suffer from falling investment over the coming years. In contrast to gold, we expect copper mining to prove more resilient as PanAust Ltd forges ahead with the expansion of its Phu Kham mine to 90ktpa by 2018.

Myanmar’s Joint Constitutional Review Committee has received over 28,247 recommendations for amendments to the country’s constitution, which was created by the former military junta and is riddled with extensive weaknesses. While we stress yet again that a genuine effort to amend the constitution would be a huge step in the right direction in terms of Myanmar’s political maturation, we note that incipient signs of potential inaction or stalling have emerged. Should the amendment process fail to yield any substantive results, we see downside risks for not only Myanmar’s political risk outlook, but also its already challenging business environment.

Myanmar remains one of very few Asian states to have withstood the tide of democratisation since the 1980s. Although Myanmar held its first elections in 20 years in November 2010, these were widely considered a sham, with the military-backed Union Solidarity and Development Party winning most of the seats.

Myanmar’s banking sector has made considerable progress over the past two years, with the provision of credit card and ATM services beginning to chip away at the economy’s formerly cash-only nature. However, both structural and policy-related headwinds continue to weigh heavily on the sector’s development potential, which in turn could limit the country’s broader economic growth outlook.

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