The National Bank of Cambodia (NBC) and the People’s Bank of China have signed a memorandum of understanding (MoU) to foster innovation in banking and payment systems, enhancing the security and efficiency of cross-border payment transactions between the two countries.
The MoU, signed on November 21 in Beijing, comprises two key areas of cooperation: financial innovation and payment mechanisms, and the establishment of payment and clearing coordination in Cambodia.
A press release from the NBC outlined that the accord aims not only to promote innovation but also to strengthen the banking sector’s capacity to support increasing trade, investment and bilateral financial flows with China.
Chea Serey, governor of NBC, highlighted the significant benefits of financial technology (fintech) to the country’s banking network in a mid-November interview with Singapore-based CNBC.
They include the development of a fast, easy and cost-effective digital payment mechanism. She noted that fintech has transformed money transfer and payment services both domestically and internationally.
She also mentioned the establishment of the inter-bank mobile payment platform, known as the “Bakong System”. The framework enables instant payments through financial institutions by scanning QR codes.
“Through the collaboration, Bakong users can transact with 83 million Alipay merchants globally. Likewise, international tourists in Cambodia can effortlessly make payments through KHQR, improving their settlement experience and contributing to Cambodia’s economic growth,” she explained.
She further encouraged Cambodian traders to open and use riel accounts and urged banking institutions to promote riel account usage and payments, maximising the system’s benefits.
In Channy, president and group managing director of ACLEDA Bank, stated on November 22 that the MoU between the NBC and its Chinese counterpart is crucial as it lays the groundwork for Cambodian commercial banks to enhance digital payments between the two countries.
“In 2010, ACLEDA signed an agreement with Union Pay International (UPI) to facilitate card payments. We have a goal to expand [transaction] services to numerous countries globally. Generally, we follow the initiatives spearheaded by our central bank, the NBC,” he said.
In 2023, the NBC signed MoUs with three Chinese banks and payment platforms, including UnionPay International, AliPay Connect Pte Ltd and the People’s Bank of China. The agreements aim to promote digital payments using the Cambodian riel and China’s renminbi (or yuan), enhancing settlement comprehensiveness in both countries, as per the NBC.