Laos will start using QR code transactions with neighbouring countries to facilitate money transfers and payments by workers and tourists in these countries, the Governor of the Bank of the Lao PDR has said.
“We will pilot the use of QR code payments with Vietnam, Thailand and Cambodia in the fourth quarter [of this year],” Dr Bounleua Sinxayvoravong told the recent 5th Ordinary Session of the National Assembly.
The central bank governor provided the information in response to a question by lawmakers about whether an effective channel was in place to enable Lao workers in other countries to send money home to Laos.
There are currently 303,391 Lao nationals working abroad. Of these, 100,230 applied for jobs legally and moved to other countries, while 203,161 went to neighbouring countries without a work permit in hopes of securing a job.
Migrant workers send about US$426 million to Laos each year, making an important contribution to the country’s economy and foreign currency earnings.
Once the QR code transaction system is in place, it will enable Lao nationals in other countries to transfer money through the banking system and save service costs, while also avoiding risks that might occur through the use of other systems.
At present, migrant workers send money home through unregulated channels, including asking their associates to take cash with them when they return to Laos, for which a fee is charged.
“Through the [QR code] system, we will address this issue and save money for workers. We can also monitor [transactions] through the banking system,” Dr Bounleua said.
The governor said the central banks of the countries involved are working with commercial banks to link up the proposed transaction system.
“Technical matters have been fully addressed. We will assess the advantages and disadvantages [of the system]. I think we will pilot the scheme in the fourth quarter,” he added.
Once in use, the QR system will enable cashless payments, also making life easier for tourists travelling in these countries.
“Thai and Vietnamese tourists can just scan their QR code to make payments here and the money is circulated within the banking system,” Dr Bounleua said.
The scheme will be initiated as part of Laos’ efforts to comprehensively improve services for tourists in an effort to attract more foreign visitors – an important generator of revenue and foreign currency.
In 2018 and 2019, prior to the Covid-19 pandemic, tourism generated US$900 to one billion dollars a year on average for Laos.
“We need to revitalise tourism in a timely manner,” the bank governor said.
He added that if Laos can attract at least 4 million foreign tourists each year, then the country’s foreign currency earnings will recover.[SOURCE]