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NBC order to protect online payments

May Kunmakara / Khmer Times No Comments Share:

All payment service providers (PSPs) in the kingdom will now have to apply for an operating licence from the National Bank of Cambodia in compliance with the bank’s new order issued yesterday to protect online customers against the risk of fraud.
The NBC’s new prakas or order will affect all registered firms providing retail outlets online services for accepting electronic payments by a variety of payment methods. The payment methods include credit card and bank-based payments such as direct debit and bank transfer.
Banks and financial institutions that offer real-time transfer for payments to shops and retail outlets, as part of their online banking services, would also need NBC approval.
According to the order, NBC approvals for a PSP licence will be given within six months from the date of application.
“In exceptional cases where further documentation is needed to determine the applicant’s eligibility for a PSP licence, the NBC could issue an ‘approval-in-principle’ before the full licence is granted,” stated the order.
“If the applicant fails to provide the required information within a certain time as stated by the National Bank, the ‘approval-in-principle’ would be withdrawn,” it added.
Chea Serey, NBC director-general told Khmer Times that those firms that wanted to apply for a PSP licence needed to have at least $2 million in reserves.
When the licence is issued, she said, the firm would have to deposit 5 percent of its registered share capital with the NBC.
“At the end of the day we want to ensure, through this prakas, that payment service providers would be able to offer risk free guarantees to their online customers that information about their payments will be protected against theft or fraud.”
Ms Serey said that since 2014, the NBC had a dedicated department to oversee payment systems in Cambodia.
“The NBC believes that innovation in the payment space can provide better and cheaper solutions for end users, promote financial inclusion and facilitate economic transactions.”
Ms Serey said the order would also apply to third-party processors that let consumers accept online payments without a merchant account of their own. 
“Over time there has been an increase in the number of deposit relationships between financial institutions and third-party payment processors and a corresponding increase in the risks associated with these relationships,” she said.
“Managing these risks can be particularly challenging as the financial institution does not have a direct customer relationship with the payment processor’s merchant clients.”
For that reason, Ms Serey said, the NBC also requires third-party processors to apply for a PSP licence to prevent financial harm to the consumer.

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