Digital Payments

Clik CEO: eKYC Key To Building Cambodia’s Digital Payments Future

Clik On Cambodia’s Digital Payments Future

People in the developed world tend to have skewed views of developing countries that they’re unlikely to ever visit — like Cambodia, according to Matthew Tippetts, co-founder and CEO of Phnom Penh-based payments platform Clik.

Tippetts told Karen Webster that those from advanced countries think of Cambodia as “frontier,” “underdeveloped” or “running critically behind the rest of the world,” but that overlooks the Cambodian market’s complexity.

He said a little over half of the Cambodian market has internet connectivity, but roughly 80 percent report having access to 4G service (with 85 percent reporting at least 3G access). Moreover, while only about 20 percent of the population has bank accounts, the vast majority of them are held by the 25 percent of Cambodian citizens who live in urban areas.

Tippetts said that urban population has preferences that have evolved — particularly amid the pandemic — to be far more sophisticated that most Westerners expect.

“In Cambodia, progress is really going at two speeds,” Tippetts said. “If you look in cities, 95 percent of people have a smartphone [and] the majority of people will have a bank account.”

He added that while Apple has only 15 percent of the Southeast Asian device market, it enjoys a 40 percent share in Cambodia.

“Consumers aren’t known for perhaps having much money to spend, but they are spending it on high-end investments in digital,” Tippetts said.

Clik is positioning itself to take advantage of such trends. The company just raised $3.7 million in a seed-funding round to bring its mobile payments, loyalty, data visualization, business intelligence and cloud data suite of services out of beta and into the marketplace.

Tippetts said that since 85 percent of Cambodian payments are still done in cash, there’s a massive opportunity to boost digital payments in the country. And from Clik’s perspective, there’s also a parallel potential to use payments as a springboard for selling merchants a more monetizable suite of services.

Capturing a Wide-Open Field

Tippetts said cards have been slow to catch on with Cambodian merchants — particularly smaller ones — because of the fees. But by making payments done through Clik into bank account transfers, the company can charge much lower commissions.

He said Clik’s first goal was: “Let’s make it simple to use.” So, the company designed an easy, phone-based app for merchants.

“We don't have to spend five minutes training somebody because there aren’t 25 buttons on the payment terminal,” Tippetts said. “We put in the capacity to refund an erroneous transaction [so] the cashier can deal with it in a minute as opposed to having to file a form to wait a week for a reversal.”

KYC Is Key

But simple and reasonably priced weren’t enough; the app also had to be secure.

Tippetts said that’s why Clik built in a set of electronic KYC tools that can digitally verify customers more reliably than banks can in face-to-face interactions.

Such verification is no small job, requiring advanced document analysis tools to make sure IDs are real and haven’t been tampered with. Clik also uses facial recognition software that knows it’s looking at a person and not just an image of that person.

And that’s layered with algorithms trained to recognize faces under a variety of conditions. But all of those tools work quickly enough that Clik can onboard a user in about 90 seconds.

Tippetts said the company also uses human audits “because we're big believers that you can't leave the machine doing things all by itself. You need a step where a human needs to cast a judgment on the results because these are algorithms and the indices of confidence are critical. … If you just wait for binary response, you're never going to get the full picture.”

“The key thing which really gives us that competitive advantage is that we can onboard people with full KYC, so we can authenticate both ends,” he said. “We can really monitor the risk, and that's one of the reasons why the central bank was positively impressed and facilitated the licensing.”

Building Out From Just Offering Payments

But secure, digitized and authenticated payments only scratch the surface of what Clik is working to build.

Tippetts said to become profitable, the firm needs to offer more than just payments alone, as that’s a low-margin business. The infrastructure Clik is building can provide merchants with value-added products, like anonymized consumer data on their stores’ shopping demographics, which can help better customize their offerings.

The system can also let merchants design loyalty programs that don’t drop them into the trap of having to offer extreme discounting to bring customers in. Instead, Clik’s system relies on offering customers cash back — a reward that merchants can control and customize.

For example, merchants can require that clients can only use cash back earned at their store within that same store. Or the system can do what Clik does for Cambodia’s second-largest mall. Consumers there can use cash back earned at one merchant in the shopping center at most of the other merchants within it. Retailers can also attach a time limit on cash back before it expires.

“The cash back [is] super easy to set up; they don’t have to integrate it into anything, and 100 percent of it comes back … over time,” Tippetts said. “That is very different from a discount, not to mention that it induces repeat purchasing.”

Making Rewards Rewarding

Tippetts said the goal is to make rewards seamless. There are no apps to download, no QR codes to scan or no series of steps to take. Tying rewards to payments happens easily and instantly, making the rewards program actually rewarding to the consumer — and thus relevant to the merchant.

“The whole point of the loyalty plan is to engage somebody — for him to come back and spend and build that relationship,” Tippetts said. “Our data can help a merchant do that while also building up [a store’s] digital payment capability.”

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