Bankers expect 50 percent cashless society in five years

Thailand’s leading bankers expect that cashless payments will rise to 50 to 60 percent of all payment transactions in the Kingdom in five years as financial institutions invest in the needed hardware and software, and the central bank considers a new structure for transaction fees.

Yos Kimsawatde of the Thai Bankers’ Association said that 30 percent of all transactions are now cashless, but banks will be investing in electronic data capture to further raise that percentage and comply with the government’s national e-payment program. The first phase of the government’s program begins in mid-July when people can register for what is known as AnyID.

AnyID will allow those registered to use their mobile phone numbers or national identification numbers to pay merchants starting at the end of October. Commercial banks will facilitate AnyID registration, allowing people to sign up through automatic teller machines (ATMs), Internet banking, mobile banking and traditional bank branches.

The second phase of the government program is centered on electronic data capture (EDC) and Thailand’s major banks will band together to oversee investment in that technology, Yos said.  Thailand has 300,000 EDC units that work with chip-based ATM cards or debit cards. However, on Monday May 15 banks will no longer issue magnetic strip ATM, debit or credit cards in order to accelerate the shift to EDC units and cashless payments. Bankers expect the number of new EDC machines will exceed 600,000 by the end of the year and then rapidly rise to 2 million across the country.

“Card acceptance must be in place in every province. Moreover, the government should motivate the use of debit cards and AnyID by offering incentives to both SMEs [small and medium-sized enterprises] and individuals,” Yos said.

The state-run Government Savings Bank is on board and investing in the new technology, its President Chatchai Payuhanaveechai said last week. He said GSB is concentrating on increasing online business and upgrading its infrastructure and technology to support the shift being promoted by the government.

As a state bank, GSB wants to play a key part in building a national electronic or e-payment money system in which a registered identification or mobile phone number can be used for cashless transactions. He said the bank will complete the installation of 2 million electronic data capture (EDC) machines at all 1,100 branches nationwide by the end of this year.

In addition, Thai Bankers Association members have agreed upon a new fee structure for digital banking that would be friendlier to consumers and it will be proposed to the Bank of Thailand for review and approval.