Thailand launches e-payment system
Thailand became the first nation in the region to implement an electronic payment regime last week when it rolled out PromptPay, the long-awaited interbank mobile payment system for consumers that is an essential foundation for building a digital economy, with plans to expand the system to business-to-business transactions in March.
“It is very important, as every country in the world is moving in this direction, and we are the first country in Southeast Asia to be able to launch an e-payment system,” said Minister of Finance Apisak Tantivorawong.
Apisak said that the ministry, the Bank of Thailand and the Thai Bankers Association had been working extremely hard during the past year to launch the system. Its roll out was originally scheduled for October, but was pushed back to iron out bugs with the technology and ensure that the system would be as glitch-free as possible when made available to the public.
But the decision to move towards a cashless system was made at least a decade ago by policymakers overseeing the financial system.
“For 10 years, we have been trying to change the method of payment from that of a cash society to a digital one. We have taken the first step to a cashless society at last,” he said.
More than two million people had signed up for PromptPay by the launch date, and the number is expected to reach three million by the end of this year, said Predee Daochai, president of the Thai Bankers Association.
“This will lead to opportunities for new digital businesses, such as e-commerce. It will also help minimize leaks in the payment process from the government and the private sector, said Bank of Thailand Governor Veerathai Santiprabhob.
Veerathai added that the focus of the banks and regulators now was monitoring and ensuring that the system is secure so that neither banks nor customers have to worry about intrusions or lack of privacy.
Although electronic money transfers were already available from banks, the fees for using Promptpay are substantially lower and so should be able to attract more consumers. Veerathai said that even before Promptpay, money transferred through mobile banking had grown an average of 74 percent each year for the past five years.
Although the business-to-business payment system will launch on March 1, another 12 to 18 months will be needed to make the system part of the capital markets in Thailand. Adjustments will be necessary to integrate the market’s clearing and settlement system into the national e-payment system, Apisak said.