The Central Bank of Cambodia is looking for ways to reduce the costs of cross-border payments. The solution appears to be through the use of digital wallets using a technology provided by Hyperledger Iroha-powered Bakong platform.
The National Bank of Cambodia (NBC) signed an agreement with Malaysia’s Maybank to see if this idea is even feasible as a digital payment platform. The study will examine if the combination of the Maybank2u digital platform and Bakong will not only operate efficiently but if this can become a long term solution to reduces the remittance fees involved with these kinds of transfers.
This system will focus mainly on facilitating money transfers, but will also be an opportunity to “offer banking services to the unbanked, especially in rural areas” the NBC explained in a statement.
The system is expected to allow customers to transfer money using either Cambodian riels or U.S. dollars and should be much simpler to use than the traditional transfer platforms. “Users no longer need to know multiple digits of the recipient’s bank account. They can now transfer money directly to their mobile number or scan a QR code via the Bakong app or through other banking services offered by member banks,” the financial institution explained in a statement.
Chea Seay, the assistant governor and director general of the NBC, added, “The MoU will enable both institutions to reach another level of financial cooperation in further leveraging the technology to benefit the people in Cambodia and Malaysia.”
More than two-thirds of all banking transactions conducted in Malaysia are performed using the Maybank app. In addition, better than half of all internet banking transactions were performed using their digital platform.
Right now, these remittance fees are a serious issue for many customers. Simple transfers between Cambodia and Malaysia, two countries separated only by the Gulf of Thailand, can cost as much as 30% of the cost of the total transaction. That is far too high and is a primary reason why NBC is seeking to find a real solution to this problem.
“We look forward to providing our customers in Malaysia and Cambodia with a convenient yet cost-effective solution for inter-country funds transfer,” explained the Head of Community Financial Services for Maybank Malaysia, Datuk HamirullahBoorhan.
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