Digital payments are becoming crucial to the management of daily expenses, especially during Covid-19 when social distancing is the norm, according to National Bank of Cambodia (NBC) director-general Chea Serey.
Serey told CNN that the number of digital transactions across the Kingdom jumped 350 per cent from end-2019 to the end of last year, and total value surged 200 per cent to $68 billion. Transactions through NBC’s Bakong, an inter-bank system, have also grown rapidly, she said.
“At the moment, we have about 1.5 million transactions in the Bakong ecosystem with a value of about $500 million. It is growing quite rapidly given that last quarter we only had 100,000 wallet users, but as of quarter two, we’ve seen that number double, now we’ve reached 200,000 users, and we hope it will increase further.
“And just as importantly, we hope that we can cooperate with other countries as well to promote cross-border transaction for tourists and migrant workers,” she said.
NBC on October 27 launched an inter-bank mobile payment platform, known as the “Bakong System”, aiming to give a powerful impetus to rural financial sector development and nurture financial inclusivity in the Kingdom.
Bakong enables interoperability between banks and financial institutions that is safe and cost-effective.
Serey stressed that there are three main goals of Bakong, the first of which is interoperability, to consolidate the Kingdom’s highly-fragmented banking system where payment service providers and banks “are not talking with each other”, and make financial translations easy.
The other two, she said, are financial inclusion and increasing the usage of local currency.
“In fact, during these social distancing measures, Covid-19, thank the gods that we had been working on the project way before the pandemic hit. So, the lining of the situation is that digital adoption is much faster, so we have simplified KYC [Know-Your-Customer] measures,” Serey added.
KYC rules ensure that financial service professionals authenticate and assess the identity, suitability and risks involved with maintaining a business relationship with a client.
Prasac Microfinance Institution Plc senior vice-president Say Sony said his institution joined Bakong in September 2019 and implemented the system the following month, adding that there has been a rise in the number of transactions through the system.
“We joined this NBC initiative because we [saw] the trend of technology and market demand, [and that] our clients – and [those of other financial institutions – were finding it] difficult to do cross-bank transaction[s],” he said.
He said there are now two main services available at all 182 Prasac branches and more than 140 merchants nationwide able to process transactions from Bakong Wallet and Transfer to other bank accounts through Bakong.
Backed by rapid technological and innovation development, Cambodian tech and digital businesses achieved $470 million in revenue for 2019, the Asian Development Bank (ADB) reported in late May.
Broken down by sectors, e-commerce accounted for 27.6 per cent, e-services 7.8 per cent, digital media 10.2 per cent, advertising technology 12.7 per cent, transportation 3.8 per cent and online travel 37.9 per cent, the Metro Manila-based multilateral lender said.