NBC Tightens Restrictions on E-Wallet Issuances

The National Bank of Cambodia (NBC) has called on business owners who issue electronic money (e-wallet accounts) for payment of products or services to send notification to the central bank within 90 days of notice in order to avoid facing legal action.

According to the NBC, various businesses in Cambodia – including coffee shops, restaurants, transportation companies, entertainment venues, gas stations, and more – have been issuing electronic money in the form of e-wallet accounts within mobile applications or via membership cards, through which customers top up funds to pay for goods or services provided solely by that specific business (Single Purpose E-Money).

However, Cambodia’s Law on Banking and Financial Institutions (1999) states that providing payment mechanisms for customer use is an activity reserved for banking and financial institutions, thus requires licensing from the NBC. Additionally, Article 20, Clause 1 of the Prakas on the Management of Payment Service Providers (2017) stipulates that legal entities other than banking and financial institutions or licensed payment service providers are prohibited from issuing electronic money.

The NBC notice adds that Article 20, Clause 2 of the same Prakas outlines certain cases where issuing electronic money does not require requesting a licence, but does require prior written notification to the central bank. To qualify for this licence exemption, each e-money account must hold no more than KHR 200,000 (~USD 50), and the total combined balance across all accounts cannot exceed KHR 800 million (~USD 197,000). E-money must also only be used to pay for goods or services from a single business or individual, along with any other rules set out by the NBC.

The central bank reminds all business owners who are not banking and financial institutions or payment service providers, and are currently issuing electronic money (e-wallet accounts), to fulfill their obligation to notify the NBC in writing within a maximum of 90 days from the date of notice. Failure to send written notification within the specified timeframe will result in legal action.

In this regard, the NBC urges members of the public to exercise high caution when choosing to register and create e-wallet accounts on mobile applications of businesses or companies that are not banking and financial institutions and do not possess the proper licence. E-wallet accounts created by customers of these businesses are not intended to act as savings accounts, and such businesses are strictly prohibited from offering interest on the balance held in those accounts. Therefore, customers should not maintain account balances exceeding the aforementioned limits and must take full personal responsibility for any risks that may arise from opening and using these e-wallet accounts.