The National Bank of Cambodia (NBC) plans to launch bilateral cross-border payments with the Philippines soon as part of the broader strategy to expand the use of QR code-based payments for seamless transactions across the region, a statement issued by the NBC on Tuesday said.
This was highlighted as NBC Governor Chea Serey took part in the second annual bilateral meeting between the apex banks of both countries with Eli M Remolona Jr, Governor, Central Bank of the Philippines, in Bohol province, the Philippines, on Monday.
The launch of bilateral cross-border comes under the umbrella of efforts to strengthen bilateral cooperation between the two central banks as well as the two countries in the monetary policy segment. The NBC already has a MoU with the Central Bank of the Philippines on cooperation in the field of cross-border payments.
“Leaders of both central banks discussed exchange of views and experience on the macroeconomics, banking sector, improving financial literacy and customer protection,” the NBC statement said.
“At the meeting, the two sides agreed on accelerating linkage of the bilateral cross-border payment plan by QR code, scheduled to be launched in the near future, to further facilitate trade and tourism exchanges between the people of the two countries,” the statement emphasised.
The National Bank of Cambodia has already announced its plans to launch fully-fledged bilateral cross-border payments with Singapore, Japan and India.
The first phase of linking Cambodia’s KHQR payment with Japan’s national QR payment code JPQR was launched in early July, allowing cross border transactions for KHQR users when in Japan.
The bilateral QR code payment system has already entered its second phase with UnionPay International (UPI) and Malaysia, allowing for convenient and secure transactions between these nations.
“Bilateral cross-border payments via the QR code have been launched in phase 2 with UnionPay International (UPI) and Malaysia, and have signed memorandums of understanding with the Philippines and Indonesia, and are planned to be launched with Singapore, Japan and India in the near future,” the NBC stated in the mid-year report released last week.
The bilateral cross-border payment project under the Bakong system is divided into two phases. In the first phase, Cambodian people using the Bakong system can scan payments in partner countries, and in the second phase, people from partner countries can scan payments in Cambodia.
According to the NBC, the development will encourage banking and financial institutions to strengthen the safety and efficiency of cross-border payment transactions, especially to participate in resolving cross-border payment transaction disputes with relevant parties in a timely manner.
The report also provided guidelines on improving the efficiency of payment transactions in Cambodia and cross-border payment transactions were issued in May of this year.
The gradual strengthening of the role of the riel in circulation, savings, and investment is crucial to continue strengthening economic resilience at a time when the value of the US dollar is increasingly volatile in international markets and poses challenges to its use for trade and investment, Serey said in the report.
“In the region, national currencies have been continuously promoted to promote trade and strengthen mutual lending mechanisms for crisis prevention and resolution within the ASEAN and ASEAN+3 frameworks,” she pointed out.
“In this regard, the NBC will continue to expand connectivity and further promote the use of the riel in appropriate payment systems with countries in the region and with international payment service providers.”
In addition to these developments, the NBC has joined the NEXUS Observatory, a project developed by the Bank for International Settlements (BIS) with the goal of accelerating cross-border payment connectivity and increasing the efficiency of multilateral cross-border payments using hybrid currencies and central bank digital currencies.
As of today, the Kingdom has established cross-border payment systems with Thailand, Laos, Vietnam, South Korea, Malaysia and China through Alipay Connect Pte Ltd. and UnionPay International (UPI).
