Background of Payment Systems
According to the definition by the Bank for International Settlement (BIS), a payment system consists of a set of instruments, banking procedures, and typically interbank funds transfer systems that ensure the circulation of money. It is generally known as the means by which funds are transferred by the system participants. In other words, there are components related to payment systems which include (1) legal and regulatory framework issued by the relevant authorities, mainly central banks (2) institutions participating in the operation of the payment systems which consists of banks, non-bank financial institutions, non-bank providers of fund transfer services, switching companies, and even central banks (3) payment instruments and clearing and settlement mechanisms in the system, which are used to transfer the funds in order to discharge the obligation arising from economic activities.
Even though the use of cash in the economy remains high, much progress has been made to develop a payment system in Cambodia. The development of a payment system in Cambodia has been observed over the years with the introduction of both paper-based and electronic instruments by commercial banks and third party processors. Checks are the only paper-based instrument for interbank transactions, while electronic instruments include payment orders (credit remittance, direct debit and direct credit), credit cards, debit cards, ATM cards, and mobile banking and mobile payments. Though electronic payments in Cambodia are deemed to be at a very early stage, it is developing very rapidly, in particular, internet banking/mobile banking and mobile payment services. In addition, the number of ATM terminals and POS also continues to rise dramatically reflecting an increase in popularity of e-payment transactions. In line with this, a number of banking and financial institutions are deploying internet banking and mobile payment services to offer various payment options to customers.
In response to advances in the market, the NBC has gone through several phases of development:
- In September 2008 the NBC issued Prakas on cheque standard to make all cheques used in the banking system uniformed and standardized to ensure a smooth and efficient inter-bank clearing and settlement.
- In 2009, the interim solution for the National Clearing House was introduced to assist data delivery in a fast and secure manner. This solution provided an enormous advantage to the members due to the fact that member banks were not required to manually re-key the check information as they could receive electronic output files from the clearing house on the same day.
- In late 2012, the NBC launched the National Clearing System, which can be used to clear checks and electronic payments faster and easier.
- Currently, the NBC is working on the Shared Switch System, which is an integrated system to facilitate e-payments, such as cash withdrawals through ATMs, payments by POS, and mobile and internet payments aimed at enhancing the effectiveness of payment services and responding to the needs of the ASEAN financial integration in 2015. Looking forward, the Real Time Gross Settlement (RTGS) System could be developed in the long run when the market demands.
Even though the use of cash in the economy remains high, much progress has been made to develop a payment system in Cambodia. The development of a payment system in Cambodia has been observed over the years with the introduction of both paper-based and electronic instruments by commercial banks and third party processors. Checks are the only paper-based instrument for interbank transactions, while electronic instruments include payment orders (credit remittance, direct debit and direct credit), credit cards, debit cards, ATM cards, and mobile banking and mobile payments. Though electronic payments in Cambodia are deemed to be at a very early stage, it is developing very rapidly, in particular, internet banking/mobile banking and mobile payment services. In addition, the number of ATM terminals and POS also continues to rise dramatically reflecting an increase in popularity of e-payment transactions. In line with this, a number of banking and financial institutions are deploying internet banking and mobile payment services to offer various payment options to customers.
In response to advances in the market, the NBC has gone through several phases of development:
- In September 2008 the NBC issued Prakas on cheque standard to make all cheques used in the banking system uniformed and standardized to ensure a smooth and efficient inter-bank clearing and settlement.
- In 2009, the interim solution for the National Clearing House was introduced to assist data delivery in a fast and secure manner. This solution provided an enormous advantage to the members due to the fact that member banks were not required to manually re-key the check information as they could receive electronic output files from the clearing house on the same day.
- In late 2012, the NBC launched the National Clearing System, which can be used to clear checks and electronic payments faster and easier.
- Currently, the NBC is working on the Shared Switch System, which is an integrated system to facilitate e-payments, such as cash withdrawals through ATMs, payments by POS, and mobile and internet payments aimed at enhancing the effectiveness of payment services and responding to the needs of the ASEAN financial integration in 2015. Looking forward, the Real Time Gross Settlement (RTGS) System could be developed in the long run when the market demands.
