The fast development of digital payment has seen the number of transactions with a blockchain-based interbank mobile payment platform Bakong, increase sharply as of June 30, 2023, National Bank of Cambodia (NBC) said.

According to the NBC semi-annual 2023 report, Bakong payment system has 70 financial institutions as members of which 49 are being actively operated.

Bakong has seen more than 11.6 million transactions in local currency (riel), which rose 4.7 times to 12.2 trillion riel (up 1.8 times), while US dollar transactions of 21.3 million saw a growth of 1.6 times or 83 percent to $8.7 billion.

On July 30, NBC governor Chea Chanto said Cambodia’s payment system has been modernised by incorporating a series of new technologies aimed at enhancing payment efficiency and security to facilitate the exchange of goods and services in the economy more easily and quickly, improve the financial inclusiveness and support the integration of payment systems into the region.

Payment through banking and financial institutions in Cambodia have become easier, responding to changes in company-enterprise behaviour and general consumers increasingly dependent on online shopping and electronic payments in the digital age.

The connection of the Cambodian payment system with other countries in the region has also been strengthened and expanded, which has contributed to the promotion of trade, investment, tourism and remittances, especially from workers working abroad.

“Among all payment systems, the Bakong and KHQR payment systems continue to raise the profile of the Cambodian payment system on the international stage, with some central banks seeking to learn from NBC’s experience in creating and developing more efficient, secure and cost-effective payment systems,” Chanto said.

Sanzhar Abdullayev, chief card and e-payment officer of ABA Bank told The Post on August 8 that Bakong significantly impacted financial inclusion, by providing an easy, convenient, and safe foundation for transactions and payments within Cambodia and abroad

“We are optimistic about its further development,” he said, adding that ABA Bank became a member of Project Bakong in August 2020.

Since then, they have seen continuous and steady growth of transactions to and from ABA Bank.

In the first six months of 2023, the number of incoming and outgoing transactions via Bakong was 50 million, while the total amount of these transactions exceeded $10 billion.

For comparison, the number of transactions was 32 million, although the total value was the same - $10 billion - for the calendar year 2022.

“We fully support Project Bakong, which revolutionised the payment and transfer landscape of the country by enabling interoperability between financial institutions and increasing the use of cashless riels.

“The trend for digitalisation in banking and finance locally and globally has been developing for almost a decade, and the launch of Bakong was just at the

right time and right place because Cambodia has great potential in the adoption of a cashless way of life,” Sanzhar said.

In 2022, ABA Bank invested more than $35 million in its infrastructure development and this year, it allocated $47 million, including investments in data centres, software, hardware and cybersecurity measures.

“We are excited to see how quickly the population changes their payment habits from cash to cashless with the help of Bakong, and from this perspective we will surely continue proposing our new digital services to our customers, the best in the market,” he added.

That being said, NBC governor Chanto warned that with the advancement of payment technology, there are potential risks that require extreme caution.

The risks can also be compounded by the rapid evolution of technologies such as cybercrime and eventual disruptions to the digital payment system, which could affect the credibility of the payment system and the banking system as a whole.

“Therefore, the NBC has stepped up monitoring and control of the payment system operation on a regular basis to ensure the stability of the payment system and potential risks,” Chanto said.