In a move to enhance cross-border payments, Cambodia’s Bakong digital currency system, a component of the National Bank of Cambodia (NBC), has entered into a memorandum of understanding (MoU) with Chinese payment provider Alipay, Cambodia’s Phnom Penh Post recently reported.
Following the signing of the MoU, Cambodian vendors utilizing QR codes from the so-called KHQR network of the Bakong system can make payments to over 80 million Alipay merchants globally, contributing to the expansion of cross-border payments between Cambodia and China.
At the same time, Chinese visitors to Cambodia who use Alipay can shop in the country by scanning QR codes from the Bakong system at participating merchants.
Local vendors can now use the KHQR network of the Bakong system, a part of the National Bank of Cambodia (NBC), to make payments to over 80 million Alipay merchants globally.https://t.co/hLagrXU08X
— The Phnom Penh Post (@phnompenhpost) November 17, 2023
The MoU, signed at the FinTech Expo in Singapore, aims to promote efficient and secure cross-border payment transactions via QR codes between the KHQR network and Alipay+.
The Bakong system is built on a blockchain, but is not a traditional central bank digital currency (CBDC) given that the circulating tokens are a liability of commercial banks and not the central bank.
Cambodia becoming more popular among Chinese tourists
Chea Serey, governor of the NBC, emphasized the significance of the collaboration, especially as Cambodia becomes increasingly popular among Chinese and international tourists.
The partnership facilitates payments in both the local currency, riel (KHR), and the US dollar (USD).
Douglas Feagin, senior vice president of Ant Group and head of Alipay+, expressed gratitude for the partnership, noting that it enhances the capability of Alipay partners to make payments across the KHQR network.
“We are grateful to the NBC for their partnership and support, which enables the acceptance of Alipay+ payment partners across the KHQR network. We believe this will offer added convenience to tourists, who prefer to ‘pay like a local’, using their familiar payment methods wherever possible,” he said.
Similarly, Khim Sambo Rothana, head of public relations and the Corporate Social Responsibility (CSR) department at ABA Bank, welcomed the MoU as a positive step toward promoting the use of the Cambodian fiat currency.
In the first six months of 2023, Bakong recorded over 35.4 million transactions, amounting to more than $12 billion.
The amount constitutes approximately 67% of Cambodia’s gross domestic product (GDP).
In addition to Cambodia, Bakong is already in use in Vietnam, Thailand and Malaysia.
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