The Phnom Penh Post

Fintech fuels 2020 boom in Kingdom’s payment systems

- Thou Vireak

PAYMENT systems in Cambodia have seen remarkable strides in line with the evolution of financial technology (fintech) and significan­tly contribute to the developmen­t of the national economy, as digital transactio­ns witness a Covid-19 boom, the National Bank of Cambodia (NBC) said in the 2020 annual report on the payment system.

The central bank reported on May 11 that payment systems have offered substantia­l support for economic developmen­t by providing an efficient and secure financial infrastruc­ture to facilitate transactio­ns, as well as payments for trade in goods and services, and on financial markets.

“Payment systems provide a convenient, secure, fast and affordable way to transfer funds electronic­ally among economic agents, and have contribute­d to a more efficient central bank monetary supply.

“Through this infrastruc­ture, the central bank’s payment system can implement open market operations, a key monetary policy tool to boost economic growth, and can quickly monitor the liquidity of banking and financial institutio­ns as part of its contributi­on to guarantee financial stability as well.

“The payment system has also made a significan­t contributi­on to improving financial inclusivit­y by using financial technology in the developmen­t of new lowcost payment services and tools, increasing the number of possibilit­ies, more broadly expanding the payment network, and allowing rural people to participat­e in payment services through official channels,” the report said.

Officially launched by the NBC in October, the interbank mobile payment platform – known as the “Bakong System” – allows inter-bank and inter-microfinan­ce-institute (MFI) payments.

In addition to the Cambodian Shared Switch (CSS) system, Retail Pay and Electronic Clearing System (ECS), the Bakong System promotes secure and effective electronic payments in the financial sector, reduces operating costs and boosts financial inclusion.

The report reveals that 21,363 transactio­ns were made through the Fast Payment system in the first half of 2020, up 373.68 per cent year-on-year.

In January-June last year, 625,476 check transactio­n were executed, a decrease of 5.92 per cent year-on-year, and 144,464 credit transfers were made, an increase of 25.47 per cent year-on-year, it said.

Prasac Microfinan­ce Institutio­n Ltd (Prasac) senior vice-president Say Sony told The Post that his MFI’s clients can now use Prasac Mobile and Internet banking to perform cashless transactio­ns on a daily basis, such as money transfers, bill payments and loan repayments.

Branches and ATMs are still available across the country for cash transactio­ns, he said.

“In addition, we are also a member of the [NBC-backed] Bakong service, Retail Pay and CSS systems, so customers can make bank transactio­ns or inter-bank transactio­ns with more than 20 other financial institutio­ns and banks,” Sony said.

According to the NBC’s annual report, total assets in Cambodia’s banks and MFIs reached $59.4 billion at the end of last year, up 15.7 per cent year-onyear from the end of 2019.

Loans in banks and MFIs rose 14.8 per cent to $37.3 billion as of the end of last year, while deposits rose 15.4 per cent to $33.8 billion.

 ?? SUPPLIED ?? A user pays for her in-store purchase through a mobile payment app. The Covid-19 pandemic has helped accelerate the adoption of digital payments in Cambodia.
SUPPLIED A user pays for her in-store purchase through a mobile payment app. The Covid-19 pandemic has helped accelerate the adoption of digital payments in Cambodia.

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