Electronic Payment or e-Payment may be relatively new for a lot of people but it is fast gaining in popularity due to its convenience and security. The Thai government is jumping on the bandwagon with the launch of its National e-Payment Masterplan to raise the standard of living of the Thai population.
Ascend Group Chief Executive Officer Punnamas Vichitkulwongsa, as chairman of the Thailand e-Payment Association (TEPA), said Thailand is moving into the digital payment era. Digital cash has become the norm in developed countries as can be seen in Sweden where only 4.4% of the population uses cash, Canada at 19.5%, the United States at 29.0%, and even Singapore at 30.5%. On the other hand, developing countries still predominantly use cash with the Philippines at 98.1%, Indonesia at 99.9%, India at 99.78%, and Thailand at 98.5%.
The high usage of cash results in a huge management cost and obstacles in access to cash. Carrying an excessive amount of cash to make payments is a security concern and cash is conducive to corruption as its usage can evade taxation. Moreover, cash transactions require documentation thus limiting efficiency in financial management.
As a result, various sectors have gotten together to push forth the National e-Payment Masterplan which involves 5 key factors:
- PromptPay allows the population to conduct money transfer using just the 13-digit identification card number. Registration will start in the third quarter of 2016 and will cover telephone numbers in the future.
- Replace cash usage with cards and e-Payment by supplying shops nationwide with the Electronic Data Capture (EDC) system by the third quarter of this year.
- Once e-Payment becomes more prevalent, tax audit will become more efficient and the need for documents will lessen so work can be streamlined. This should be introduced in the fourth quarter.
- The state e-Payment system will be used to pay out welfare through the PromptPay campaign.
- Education and support for electronic transactions are important parts in helping Thais know, understand, and use e-Payment efficiently.
By the second half of 2016, money transfers will be possible via the PromptPay scheme. Cross-provincial money transfers, which used to be carried out at commercial banks and waste time and money, have been replaced by Internet Banking but that still faced access restraints. Now, PromptPay will simplify the process and keep the transaction fee very low for consumers and commercial banks.
These are the major changes to Thailand’s financial system but what is also required is an update of the rules and regulations governing the sector, development of the various infrastructure and support systems, and a guarantee of the safety of the technology to be used.
e-Payment is a national agenda that requires cooperation from all sides. It all starts with the registration for PromptPay in July. This will set the path to reset Thailand and generate positive changes to bring the country into the digital era.