International electronic payment providers to boost central bank's efforts in Cambodia

The increased number of banks and mobile platform payment services across Cambodia has aided the efforts of the National Bank of Cambodia (NBC) to boost circulation of the riel within the country.

There has been a noticeable growth of 33% on year-on-year circulation of the national currency and a 37% increase in deposits between 2019 and 2020, according to the NBC 2019 Review and 2020 Outlook report. While boosting riel circulation locally by implementing monetary policies has been adhered to, there have also been present several electronic payment service providers for international merchants such as Visa and Mastercard, which allow payments to be accepted in both riels and US dollars.

UnionPay Cambodia, a subsidiary of financial services corporation China UnionPay, says it supports card payments in multiple legal tenders because the cards can be issued in one or more currencies. Furthermore, UnionPay is prepared to implement card payment settlements in riels, as it responds to the demand of the market and the financial institutions it serves and supports. Thus, in 2019, the number of UnionPay debit cards issued in the country grew by more than 20% year-on-year, while card spending jumped by close to 40%, continuing an ongoing upward trend.

This trend is even more marked for Visa Cambodia. Its figures show that transactions on Visa cards were up by 93% in the fourth quarter of 2019 in comparison with 2018.

However, according to the country manager of Mastercard for Indochina, its figures show that more than 90% of all transactions in the country are still in cash. As a result, the card scheme is currently looking at ways to convert those cash transactions to digital cashless transactions by encouraging consumers to use more digital payments with various incentives.

For instance, Mastercard allows payments to be made through its cards to be in both riels and US dollars. For international transactions, the usual conversion rates apply. However, a city such as Phnom Penh has many transactions in US dollars because it is still the most trustworthy currency. In the capital, there are far more transactions in US dollars because it is still the dominant currency.