New Players Shake Up Mobile Money Market

Since launching in 2009, Wing has been largely on its own in the mobile money transfer market, opening thousands of payment kiosks across the country and benefiting from a rapidly expanding base of mobile phone users.

But with a number of firms entering the market this year, Wing is facing something new: competition.

A man sends money at a Wing mobile payment kiosk in Phnom Penh on Thursday. (Jens Welding Ollgaard/The Cambodia Daily)
A man sends money at a Wing mobile payment kiosk in Phnom Penh on Thursday. (Jens Welding Ollgaard/The Cambodia Daily)

Five brands—SmartLuy, Metfone’s eMoney, Thai-owned True Money, Asia Wei Luy and microfinance institution AMK’s Mobile Money Transfer—have all moved into the market over the past six months, threatening the dominance of Wing.

The mobile payment market is particularly lucrative in Cambodia, where about 94 percent of “working age” people—between 15 and 65—own a mobile phone, according to a study released last month by the technology NGO Open Institute, and with a large population without bank accounts.

Mobile money transfer systems allow customers to send money by depositing cash at an outlet in return for a code that is then texted to a recipient who can use it to withdraw the cash within minutes from an agent in another location.

“People can automatically send money to their family without having to go anywhere. It is just much easier” than transferring money through banks, said Javier Sola, director of the Open Institute.

Ian Watson, CEO of Cellcard, which is owned by Kith Meng, who also owns Wing, said he did not expect the new players to significantly reduce Wing’s customer base in the expanding market.

“Everyone thinks you can build a mobile money ecosystem overnight,” Mr. Watson said. “It’s tak en Wing the best part of five to seven years to establish themselves, and in one way it has done others a favor.

Mr. Watson said Wing plans to invest heavily to expand its network of agents, and is expecting to add about 1,500 new branches across the country over the next two years.

“Customers from some of the newer players have complained about not being able to withdraw cash—and that’s down to the importance of a liquid and secure net work,” he said.

While Wing maintains the most expansive reach, newer players have begun price wars to draw in customers.

“Before, a lot of people used Wing, but now we are getting more customers because eMoney charges almost half the price of Wing,” said Vichheka Run, an eMoney agent in Phnom Penh.

“Many people did not know about eMoney—when I started four months ago only had five to 10 customers a day, now I’m averaging 20 to 40,” she said.

Ms. Run added that growing interest in becoming a mobile money agent has caused a considerable cramming of vendors on the capital’s streets.

“It’s not unusual to have a Wing agent next to eMoney—but agents from the same company must be at least 200 meters apart.”

As the popularity and technological ease of mobile money transfers increase, central banks around the world and the International Finance Corporation (IFC) have warned of the risks inherent in the practice—particularly the threat of fraud and money laundering.

In Cambodia, there have been scattered arrests over the past year at Wing kiosks where would be fraudsters have attempted to collect money.

Chea Serey, director general at the National Bank of Cambodia (NBC), said that the central bank was closely monitoring the mobile money transfer business, and was currently adapting regulations to monitor financial risks as the market develops.

“With the flourishing of mobile money transfer business as well as the payment services business the National Bank of Cambodia is currently updating the legal frame work in the area of payment,” Ms. Serey said via email.

“The lack of consumer education and protection remain a major challenge to prevent fraud and abuse,” said Ms. Serey, adding that the NBC will launch a campaign next month aimed at teaching people in rural areas and younger populations in cities how to make sure the money they transfer stays secure.

Increased competition in the market is likely to bring new challenges, as companies must now vie for agents as well as customers, said LeeAnne Pitcaithly, an independent consultant for digital financial services based in Cambodia.

“It’ll be interesting to see if Cambodia can sustain a market with so many offerings of essentially the same thing,” said Ms. Pitcaithly.

“The exciting part of this market will be to see how they create their niches and differentiate to meet the demands of Cambodian consumers.”

(Additional reporting by Kang Sothear)

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