World-best Korean-style FinTech has been exported to Cambodia, innovating its backward financial systems.
It is the first time that an indigenous SME exported the Korean-style FinTech, e.g. the domestic financial payment network and virtual accounts. It is forecast that the Korean-style FinTech will become another Korean Wave in underdeveloped countries in Southeast Asia, Africa and Central and South America.
A financial IT enterprise WebCash announced on February 8 that it joined hands with a Cambodian communications and financial service provider ‘Wing’ to begin providing the ATM cooperative network service at the end of last year, and recently started the ‘PayRoll’ service, a smartphone-based payroll transfer service. The company will also start the billing service and foreign currency transfer service.
The PayRoll service, which WebCash began to provide in earnest this year, allows businesses and institutions to send amounts of wages and ID numbers to wage recipients via smartphone text messages and pay wages. If the institutions or businesses paying the wages deposit the wages in the virtual accounts assigned by WebCash, text messages will be automatically sent to the wage recipients. Employees who receive the wage text messages will present the text messages at an agency of Wing, a local communications and financial service provide that entered into an agreement with WebCash, and receive the amount. There are 2000 Wing agencies throughout Cambodia.
Most Cambodians cannot receive their wages through bank transfers as they do not have bank accounts. Even if they have accounts, they find it very inconvenient as there are too few bank branches. Currently only 30% of Cambodians have bank accounts, and the largest bank in Cambodia has only 120 branches.
“We started it in January and now 10,000 people in 10 companies are using this service,” said Yoon Wan-soo, CEO of WebCash. “The number of users is rapidly increasing.”
In April it will also start the billing service, which collects communication charges, electric charges and fees for private educational institutes by proxy. Smartphone text messages will be sent to those who need to pay such charges and fees so that they can pay the money at the nearest Wing agency.
In the past, they had to visit telecommunication service providers or power companies, far from where they live, in person, wait in line for a long time, and pay the charges or fees. Yoon Wan-soo said, “Wing provides the network and infrastructure, and WebCash provides the billing system and service.”
WebCash is also preparing a new service that will allow Cambodians to transfer foreign currency more conveniently. At the end of last year the company started the service by supplying ATMs to Cambodia and building the payment cooperative network. Cambodians can use Wing’s ATMs to transfer money. WebCash supplied 20 ATMs last year, and is planning to supply 200 additional ATMs this year.
WebCash’s export of the PayRoll service is very significant in that the high-quality Korean-style FinTech technology was implemented overseas for the first time. Korea has been using virtual accounts to collect charges and fees, including utility bills, since the early 2000’s. Virtual accounts were also used for securities accounts or insurance premium payment. They are widely used in various areas.
As most financial companies, including banks, have ATMs, it is possible to easily deposit, withdraw or transfer money or inquire accounts regardless of time and place. The Korea Financial Telecommunications & Clearings Institute provides the financial cooperative network so that payments between different financial companies and institutions can be linked.
“Korea has been applying FinTech to various financial services since the early 2000’s,” said a financial IT expert. “It is possible to export the Korean-style FinTech to underdeveloped countries with financial infrastructure inferior to that of Korea.”
It is forecast that Korean-style FinTech will be actively exported to Southeast Asia, Africa and Central and South America other than Cambodia that have poor financial and wired network infrastructure. As most countries with poor infrastructure skipped the wired infrastructure and adopted the wireless infrastructure, the smartphone penetration rate is high. A financial IT expert said, “Sooner or later FinTech will become the core of the new Hallyu (Korean Wave) following public IT services like e-Government.”
WebCash will establish the B2B FinTech Research Center at the end of this month. The WebCash B2B FinTech Research Center will consist of 16 persons in total. Yoon Wan-soo, CEO of WebCash, will take the helm of the center. It will be in charge of B2B FinTech case studies and product R&D.