The cashless economy is around the corner. There are still problems. But collaboration among industry players will lead to innovative solutions.
By Oliver Ward
Digital payments took off in Thailand in 2017. The volume of mobile payments for June 2017 reached 694 billion baht (US$22.1 billion). It is a significant increase from 440 billion (US$14 billion) the previous June. Mobile and internet banking has been steadily increasing. The conditions are ideal for the expansion of the e-payment industry.
Making the move to cashless will benefit the Thai economy
Veerathai Santiprabhob, the Governor of the Bank of Thailand believes a cashless society would improve Thailand’s global competitiveness. Reducing transaction costs through e-payment systems will benefit all sectors of society.
On average, small businesses increase sales by 17% by installing an e-payment option. For large businesses, this figure rises to 22%. This occurs for two reasons. Firstly, it reduces sales lost from customers who do not have enough cash on their person. Secondly, e-payment data provides information on consumer spending habits. Businesses can analyse this data and streamline promotions accordingly.
VISA estimated the net benefits to Bangkok’s economy. The estimation assumes the entire population moved to digital payments.
Is Thailand ready to go cashless?
The chairman of the Thailand E-Payment Trade Association (TEPA) believes Thailand could go cashless within three years. Punnamas Vichitkulwongsa made the comments in August 2017.
There have certainly been indicators that Thailand is ready to go cashless. In Q3 of 2017, Thailand standardised its QR payment platform. Last year larger banks also updated their mobile apps to support QR code payments.
The Ministry of Finance has been a prominent force behind Thailand’s move to cashless. Last year, it distributed 550,000 electronic data capture (EDC) terminals nationwide. In 2017, it launched PromptPay. PromptPay allowed citizens to receive cashless payments from government agencies. They could also send money to other users with just the recipient’s mobile number, or Citizen ID number. The e-payment initiative already has 18 million users.
Fintech and e-payment events are also driving Thailand towards a cashless economy
Events which bring players in the e-payment industry together also drive the industry. On February 5th, Terrapin will host Seamless Thailand. It is an opportunity to bring all the players in the e-payment industry to share their experience. Events like Seamless help the industry tackle potential problems.
BPC Banking Technologies will share its experience in preventing cybercrime and fraud. The Ministry of Finance can share the effects of its regulations. Speakers will also deal with factors limiting the growth of e-payments. They will also outline how individual businesses can navigate the impending cashless society. All sides of the industry will attend. It is an immense opportunity to solve potential problems.
There are still barriers to overcome
Mr Nuttawit Polwattanasuk is the Managing Director of the e-commerce company, LnwShop. He believes security is a major concern for shoppers. It is one of the biggest problems facing the e-payment industry. “Many Thai shoppers still voice their concerns about the safety of online payments,” he said. Rolling cashless payment technologies out to rural areas is another problem.
Thailand is not ready to go cashless in 2018. But the infrastructure is there to make the transition in the next three years. There are still barriers. However, events like Seamless provide an opportunity to overcome them. Players in the e-payment sector are regularly collaborating and sharing experience. Innovative solutions will materialise.
The cashless society is just around the corner. Thailand is in the perfect position to reap the benefits of being an early adopter.