Cambodia’s national payment system, Bakong, has seen a significant increase in user activity over the past year, with transaction volumes tripling compared to previous years. According to a recent report released by the National Bank of Cambodia (NBC), the volume of transactions on the Bakong platform in 2024 now accounts for 330% of the country’s gross domestic product (GDP), indicating a substantial growth in the platform’s adoption.
Launched in 2019, Bakong is a blockchain-based payment system that has been steadily gaining traction within Cambodia’s financial ecosystem. While often referred to as a central bank digital currency (CBDC), NBC classifies Bakong as a tokenized deposit initiative, as the balances on the platform are backed by funds held in bank accounts.
The annual report revealed that there are currently 30 million Bakong wallets in circulation, a number that exceeds Cambodia’s population. However, the central bank clarified that one payment provider with a single bank account can support multiple wallets, leading to the inflated figure. The more accurate metric for measuring growth, according to the banking regulator, is the number of Bakong accounts, which stands at 642,500.
One of the key indicators of Bakong’s growth is the increasing number of merchants accepting payments through the platform. The report disclosed that over 4.5 million Cambodian merchants now support Bakong payments, driven by factors such as lower transaction fees, faster settlement times, and interoperability with various systems. Additionally, the use of a standard QR code for Bakong transactions has further facilitated its adoption among merchants.
In 2024, the total transaction volume on the Bakong platform reached US$104.81 billion from 608 million transactions, marking a significant 95% increase from the previous year. The report highlighted a growing number of cross-border and tourist transactions as contributing factors to this surge in activity.
To promote further adoption of Bakong, the NBC has implemented several initiatives, including the launch of a mobile payment system for tourists in mid-2024. This initiative aims to drive up user engagement with the platform and encourage the use of the local currency, the riel, in a bid to reduce dollarization in the economy.
In a broader context, a recent report by Astute Analytica predicts that the global digital payments market will reach a value of $712 billion by 2033, with a compound annual growth rate (CAGR) of 21.80%. Factors such as increasing mobile phone penetration, rising internet usage, and the proliferation of e-commerce are expected to drive this growth. The report also forecasts that the Banking, Financial Services, and Insurance (BFSI) sector will lead the industry by 2033, with mobile wallets and biometric authentication experiencing significant growth.
Despite the promising outlook for the digital payments industry, challenges such as lack of trust, financial literacy, and regulatory hurdles remain significant barriers to achieving the projected market value. However, with ongoing efforts to address these challenges and promote financial inclusion, the future of digital payments appears bright.