The National Bank of Cambodia has continued its quest to increase the number of agreements to east cross-border payments and digitalised payments by signing agreements with Alipay Connect Pte. Ltd. and the PBOC (People’s Bank Of China).
NBC Cross-border QR Code Payment Cooperation With Alipay
In November 2023, H.E. Dr. Chea Serey, Governor of the National Bank of Cambodia confirmed the signing of a Memorandum of Understanding on “Cross-border QR Code Payment Cooperation” with Alipay Connect Pte. Ltd.
This agreement will promote KHQR codes through Alipay Connect Pte Ltd’s digital wallet, which is commonly known as Alipay. Chea Serey announced this would allow Cambodia Bakong users to access Alipay+ and 83 million merchants worldwide as well as allow international tourists to make payments to KHQR merchants in Cambodia.
Local Cambodian banks will need to inform their merchants to open KHR accounts and start accepting KHR payments to enable Cambodians to use riel from their Bakong wallets to shop with the extensive network of Alipay merchants – this applies to those travelling overseas from Cambodia too.
It also means that Chinese tourists who have accounts with Alipay can shop in Cambodia using the QR codes of the Bakong KHQR system – the Chinese tourism market is highly sought after and catered for in the Kingdom.
Dr. Chea Serey told CNBC that, “this will make the tourist experience much more convenient, but also boost the local (Cambodian) economy as small businesses will be able to sell more as Chinese tourists will find it more easy to make payments.”
AliPay is an affiliate of the behemoth Chinese Ant Group which has been impacted by crackdowns in the tech sector in China. This forced group founder Jack Ma to look at splitting up the lucrative business to comply with regulations. Chinese authorities in July 2023 announced a fine of 7.12 billion yuan (USD $984 million) for Ant Group for violating laws concerning consumer protection and corporate governance.
In November 2023, Ant Group reported it made a net profit of 2.59 billion yuan (USD $357.34 million) in the three months to June 30 2023, which is a downturn of 64.67 per cent from 2022.
E-commerce giant Alibaba Group Holding Ltd. is an affiliate company of Ant Group and the Chinese government has approved their rollout of products powered by its AI language model Bailing to the public. In September 2023 Ant released its financial large language models Zhixiaobao (which answers questions for customers like a chatbot), and Zhixiaozhu – an assistant for financial professionals.
- In July 2023, NBC signed a MoU with China’s UnionPay International on the use of QR codes for cross-border payments.
NBC And People’s Bank Of China MoU
The People’s Bank of China, which is the country’s central bank, signed a memorandum of understanding (with the NBC for a yuan clearing arrangement in Cambodia. This is intended to enable Cambodian companies to more easily conduct financial transactions with China in yuan.
The NBC said online, “At Beijing on Tuesday 21 November 2023, H.E. Dr. Chea Serey, Governor of the National Bank of Cambodia and H.E. Dr. Pan Gongsheng, People’s Bank of China (PBOC) Governor and SAFE Administrator, signed Memorandum of Understanding (MoUs) on the cooperation in the Area of Financial Innovation and Payment Systems, and ii/-the establishment of a Clearing and Settlement Arrangement in Cambodia.”
The two central banks met in April 2023 to discuss bilateral cooperation on payment connectivity and cross-border local currency settlement. Cambodia has also applied for membership in the Cross-Border Interbank Payment System (CIPS).
PBOC has signed similar yuan-clearing agreements with Brazil, Kazakhstan, Laos, and Pakistan as it tries to boost the yuan globally.
The two central banks also reportedly signed MoUs on the cooperation in financial innovation and payment systems, said a PBOC statement.