New e-payment system increasing business for top bank
PromptPay, the recently launched national e-payment system, has sparked a 130 percent increase in electronic transfers at KBank, one of Thailand’s biggest financial institutions, boding well for the future of the Kingdom’s aspirations of becoming a digital economy and putting Thai banks on a par with their international counterparts.
Formerly known as Kasikorn Bank, KBank is consistently ranked among the top four largest banks in the Kingdom and among the most consumer-friendly. KBank executives said that over three million of its customers have enrolled in PromptPay and they expect the figure will hit five million by the end of this year.
When people realize how safe and secure the service is, executives said, the number of enrollees is likely to dramatically increase.
The government rolled out PromptPay at the end of January, and is planning to launch a business-to-business version of the service in a matter of weeks. Although Thai banks have had electronic money transfer services for many years, the fees are relatively high for some consumers, especially low-income earners, and that discouraged their use except when absolutely necessary.
Digitizing banking and financial services to move towards a cashless economy is a component of Thailand 4.0, the 20-year national strategy to transform Thailand into an economy and society that is more advanced, is driven by innovation and creativity, applies higher technology, relies on research and development, and is more green and sustainable.
Most major banks such as KBank, Siam Commercial Bank, Bangkok Bank and Bank of Ayudhya have upgraded their mobile payment services to include a PromptPay option. The Bank of Thailand, the country’s central bank, has opened a call center to field questions from consumers who are unsure about the service or need help in navigating it.
While PromptPay may reduce some fees charged by banks, KBank executives said the service is bringing the institution other benefits by reducing some operating costs. They expect to save about $28 million this year in the bank’s cash-handling costs because of PromptPay.
E-transactions have already increased 45 to 50 percent this year, they said, largely because of PromptPay.
PromptPay has enormous room for growth, as only about 5.5 million consumers had signed up for it by the end of March. There are about 90 million registered mobile phone numbers in Thailand, although the population is 68 million.
KBank said it would launch a marketing and public information campaign to reassure consumers about the service and urge them to sign up.