Cambodia Partners With Malaysia For Cross-Border Digital Money Transfers

Cambodia’s central bank is partnering with Malaysia’s Maybank for digital cross-border money transfers. The transfers will initially start with Malaysia to Cambodia, with Cambodia to Malaysia to be added in the future.

The National Bank of Cambodia (NBC) — Cambodia’s central bank — and Maybank will facilitate the transfers via the banks’ e-wallets, Bakong and MAE app, according to LedgerInsights and other media outlets on Friday (Aug. 13).

See also: Malaysia’s Mobile Money, Bangladesh’s bKash Team With Ripple On eWallet Remittances

The new effort enables Maybank users to send up to $2,500 directly to NBC’s customers via their Bakong eWallet’s registered mobile number. The new service has lower fees and happens in real time, according to the article.

Cross-border transfers are top of mind as countries try to get a handle on central bank digital currencies (CBDCs). A large percentage of global money transfers are made by people who are sending funds back home.

Money transfers are currently slow, expensive and subject to variable fees, depending on the region, source or route. Last year, worldwide money transfers totaled $702 billion, with $540 billion taking place in lower-income regions, according to World Bank data, LedgerInsights reported.

By utilizing a CBDC system, it’s expected that the costs will be minimized. Maybank is charging a “minimal service fee” for the new partnership with NBC, per LedgerInsights. 

See also: Jamaica’s Central Bank Tests Country’s First CBDC

Having a digital solution can also help with identity verification, since the service uses registered mobile numbers instead of bank accounts, although an account is established in the background. It is in this manner that Cambodia is tackling the issue of the unbanked households in its country. 

“One of the main reasons for Bakong is to make usage of the local currency easier for the people, [and] more convenient. And so ultimately, we want to see direct conversion from (Malaysia’s) Ringgit to (Cambodia’s) Riel,” said NBC Assistant Governor Dr. Chea Serey, per LedgerInsights.