Cambodia’s blockchain-driven payment application ‘Bakong’ aims to increase future capabilities

Tom Starkey

The National Bank of Cambodia’s flagship blockchain-driven payment application ‘Bakong’ will continue developing its e-KYC and open API capabilities as well as increase cross-border payment options for its 297,000 currently registered users.

The mobile application, launched in 2020, is Cambodia’s first integrated payment system and was designed to allow customers to perform several functions, such as using an e-wallet and making mobile payments, online transactions, and financial applications.

To read more about the Bakong payment application click here.

Speaking at the fourth installment of the Cambodian Association of Finance and Technology and SOSORO Financial Literacy Series, NBC representatives discussed the implications and opportunities presented by the Bakong System.

Single e-KYC registration

Roeun Nimol, Deputy Head of Payment Support Division & Lead of Bakong Promotion said in the future, all Bakong accounts will be able to register using a single e-Know Your Customer (KYC) system. At the moment, each member has to register with a unique KYC, which is linked to one of the members.

“In the future, we will make a central e-KYC, which means that you can register with one bank and switch to another without having to register again. Secondly, we will also be working on an open Application Programming Interface (API). This is being explored in the future,” she added.

Roeun Nimol, Deputy Head of Payment Support Division & Lead of Bakong Promotion.

NBC Director General Chea Serey has previously responded to questions regarding the security of data and e-KYC norms stating blockchain is proving to be one of the most secure methods for financial transactions. Adding in terms of data security even though we as the central bank introduced the system, we don’t do the KYC requirements ourselves.

“We delegate that to the commercial banks to complete the registration on our behalf. So, the commercial bank will protect the information, in the same manner, they would someone opening a bank account in a branch, Serey said.

To read more about Chea Serey’s thoughts on e-KYC technology click here.

Phillip Bank utilizes partnerships to increase digital capabilities

Phillip Bank Plc. Cambodia’s only fully Singapore-owned commercial bank has outlined plans to extend the Bank’s footprint in the digital services focusing on B2B2C through partnership with major merchants to digitalize the process to create smoother and faster customer flow toward their business.

After the completion of its merger with KREDIT Microfinance in early 2020, Phillip Bank’s Chief Executive Office Mr. Chan Mach is ready to follow the Bank’s vision of “Growing people, delighting customers and benefiting communities” using its digital transformation as the driving change.

Upon completing the merger with KREDIT in 2020, Phillip Bank is now one of largest commercial bank in Cambodia in terms of the branch network.

Chan Mach, Chief Executive Officer of Phillip Bank PLC.

Phillip Bank is also a member of the National Bank of Cambodia’s signature initiative Bakong payment application and KHQR project, and is among the bank with highest number of Bakong users. The Bank provides the KHQR service to more than 3,000 merchants and will soon reach to 6,000 merchants.

Phillip Bank KHQR can accept payment from the mobile application of various banks and financial institutions.

Through this digital infrastructure, Phillip Bank aims to a leader in digital banking, equipped with a wide-ranging digital product ecosystem that will benefit the daily lives of its customers. The Bank also has plans to collaborate with Business Process Outsourcing companies such as Massive Distributions to promote its rapid digital growth.

Partnering with such firms is an important strategy for increasing the competitiveness of financial institutions in a sector that is competing for resources.

Cross-border payments continue to develop 

Roeun Nimol also commented that the central bank was working on expanding cross-border transfer options after the initial cross-border transactions from Malaysia through Bakong member MayBank.

The agreement currently allows transfers of up to $2,500 or RM10,000 equivalent daily for cross-border and remittance payments.

“We are also working with members to allow for cross-country transfers, such as in Malaysia, South Korea, and Thailand as there are a lot of Cambodian workers in these countries who would benefit from being able to send money back to Cambodia.”

Ouk Sarat, Director of the Payment System Department.

Ouk Sarat, Director of the Payment System Department commented when asked about including cross-border transfers with Chinese and American banks the process for setting up this functionality is member-driven, so International banks transfer must be requested by a member.

However, he said that they are open to exploring these possibilities in the future. Talking about how long it will be until the Bakong is fully adopted by the Cambodian population, Sarat said that it will be down to a combined effort towards expansion by members, the NBC, and all partners.

To watch Cambodia Investment Review’s interview Ouk Sarat click here.

Optimizing Cambodia’s payment options

Blaise Kilian, Co-Director of SOSORO said Bakong will be extremely important for the improvement of banking, banking services, and the population, adding, that the system will aid the expansion of the banking sector.

“Bakong is in the middle of all topics surrounding exchange and optimized banking and we are very pleased to be having these discussions in SOSORO,” he added.

Th well attend event was held at the SOSORO Museum in Phnom Penh.

According to the National Bank of Cambodia, the application currently has 297,000 registered users and after partnering with Cambodian banks, the system has now reached over 7.9 million people.

Currently, the platform comprises 62 member institutions of which 34 member institutions already launched the service in the market while other remaining institution members are still in the development phase

E-payments in Cambodia are also continuing a strong upward trend with data from the National Bank of Cambodia revealing there were 698.8 million transactions, valued at $199.76 billion in 2021 as more companies utilize e-payment technology.

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