Cambodia Investment Review
In 2023, Cambodia witnessed a significant increase in digital financial transactions, with the total volume surpassing $492 billion. This growth is part of a broader trend in Cambodia towards digitalization and financial technology adoption, aiming to enhance the efficiency and accessibility of financial services across the country. This move towards a cashless ecosystem is reflective of concerted efforts by various stakeholders, including the government, financial institutions, and technology providers, to foster a more inclusive and modern financial landscape.
Read more: Opinion – Prioritize Bakong and Digital Banking for Financial Evolution
On March 31, 2024, Cambodia Association of Finance & Technology issued a statement highlighting the pivotal role of the NBC in this transformative journey. The central bank has been crucial in enacting policies and frameworks that encourage cashless transactions. Notably, the implementation of the KHQR code system and the Cambodian Shared Switch (CSS) initiative have been key in diminishing the dependency on tangible cash. These advancements have streamlined financial operations, rendering them more convenient and secure for both consumers and businesses alike.
Bakong: A Game-Changer with 27.6M Accounts Across 2.9M Merchants
The emergence of the Bakong system, a market-leading digital payment platform, is a landmark development in Cambodia’s journey towards financial digitalization. With 27.6 million accounts accepted by 2.9 million merchants, the Bakong system’s widespread adoption is a clear testament to a significant alteration in the transaction behaviors of the Cambodian general population. The platform’s effectiveness in enhancing transaction efficiency and inclusivity is a promising sign for the future of digital financial services in the country.
Moreover, Cambodia’s ambitions are not confined within its borders; the NBC is actively seeking to improve payment system interoperability with neighboring nations such as Laos, Thailand, and Vietnam. This regional strategy facilitates smoother cross-border transactions and positions Cambodia as an engaged contributor to the evolution of financial technology in Southeast Asia, as added in the statement.
Future Prospects: Towards a Fully Cashless Society
The ‘Cambodia 2040’ report series, published by Future Forum and Konrad-Adenauer-Stiftung Cambodia in 2020, lays out the strategic developments necessary for Cambodia’s transition to a completely cashless society. These include:
- Boosting access to technology and internet connectivity
- Implementing digital identification systems
- Crafting supportive regulatory frameworks
- Promoting government engagement in digital payments
- Backing market support initiatives
These pillars are crucial for establishing a supportive ecosystem for digital payments, reflecting a holistic approach to financial digitalization, as noted by the think tank.
Importance Of Government Policies In Expediting This Digital Shift
The report further underscores the importance of government policies in expediting this digital shift. Measures aimed at guaranteeing universal access to mobile phones and the internet, along with providing digital legal identification, are essential for widening participation in the digital economy. Moreover, the government’s commitment to establishing a consumer-protective regulatory landscape and enhancing interoperability among payment systems is fundamental for fostering confidence in digital transactions.
By digitizing public financial management and incentivizing SMEs to embrace digital payment solutions, the government is setting a precedent. Such initiatives are crucial for promoting broader acceptance of digital payments across various economic sectors, the report highlights, paving the way for a more digitally inclusive Cambodia.
