The National Bank of Cambodia (NBC) is working with Lao and Vietnamese authorities to expand the use of KHQR code cross-border payment systems to promote trade and investment as well as increase the scope of regional economic linkages, and in particular, facilitate remittances from overseas workers.
KHQR is a universal quick response (QR) code system created for retail payments in the Kingdom and cross-border payments within the ASEAN bloc, according to the central bank.
Electronic payment solutions continue to be developed and modernised in line with growing demand and the burgeoning financial technology (fintech) market, to improve the effectiveness and affordability of transactions and ensure safety and security, the NBC noted in its first-half report released on July 26.
NBC projects such as the Electronic Clearing System (ECS), Quick Payment System, and Cambodian Shared Switch are being updated to add some essential functions, the report said, adding that work is underway on the Bakong system to facilitate large transactions between banks.
Electronic payment transactions have continued to rise, with fund transfers made through retail pay systems in the local currency over the first half nearly doubling on a yearly basis, it said, adding that 8.1 million transactions have been made through Bakong since its inception, worth 18.5 trillion riel ($4.5 billion).
Speaking at the opening of the annual conference on July 26, NBC governor Chea Chanto said that the Covid-19 crisis has significantly changed the behaviours of producers, sellers and consumers when it comes to business, shifting them towards a heavier reliance on online platforms for purchases and sales, which can be made from anywhere in the world.
Accordingly, the Cambodian payment landscape is constantly being developed and modernised based on the development of new financial technologies that promote interoperability and cross-border connectivity, he said.
Chanto recapped that the Cambodian payment system has been linked to Thailand and Malaysia, with Laos and Vietnam expected to join, in a bid to support bilateral trade, investment and tourism, as well as remittances from overseas Cambodian workers.
ACLEDA Bank Plc president and group managing director In Channy welcomed the expansion of KHQR across the region and further afield, saying that this reflects the NBC’s fintech development efforts towards financial inclusion.
“I’m glad to hear this important news, and ACLEDA Bank will be happy to participate in KHQR service to Lao PDR and Vietnam since we have had good experiences in Thailand,” he said.
Although outbound transactions to Thailand “work fine”, inbound service will be launched “late this year”, Channy said citing NBC assistant governor Chea Serey.
The NBC officially launched the KHQR system early in June, following a pilot run, to facilitate cross-bank payments and encouraged businesses and consumers to take advantage of this achievement to drive fintech innovation in banking and finance.
According to an NBC report, all 37 Bakong member banking and financial institutions participated in the development of KHQR. Of those, 29 successfully launched a trial run for the KHQR payment for goods with 230,000 merchant stores across the country.