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Plastic cards will become more popular than cash over the next five years, according to the Bank of Thailand.
The central bank forecasts electronic payment services would increase in popularity now that commercial banks and non-bank institutions compete to offer an assortment of new services to satisfy customers' demands.
In particular, credit, debit and ATM cards would be commonly used in place of cash for payments and fund transfers.
Credit and debit cards look to be the most popular. But debit cards are likely to enjoy higher growth than credit cards because the customer base is broader. Also, credit card holders need a minimum monthly salary set by the central bank.
ATM cards are expected to be less popular because banks are encouraging customers to hold debit cards.
In addition, banks have adopted new technologies and innovations for card issuance to meet customers' needs in terms of safety and convenience.
This year, many banks introduced ''contactless'' cards tailor-made for quick payment for products and services whose prices are low, such as Skytrain and subway fares.
It is expected the competition in developing e-payment services in various forms in place of cheques and cash would intensify because the cost is lower than for opening a bank branch and it is a global trend.
According to credit card service data in 2007, spending totalled 840 billion baht compared with 755 billion the year before.
However, spending grew only 11.3%, down from 20.7% in 2006, showing that cardholders were more careful about spending due to much higher living costs.
Debit cards were mostly used to withdraw cash, as with ATM cards. Use for money transfers and payments for products remained low. The number of transactions totalled 538.29 million in 2007. Of the total, 79.6% were cash withdrawals.
As for ATM card use, the number of transactions totalled 571.3 million last year, down 9.7% from 632.7 million in 2006.
But overall, cardholders were using the services in a more practical manner. This could be witnessed by a decline in cash withdrawals by 14.5% and an increase in money transfers and deposits by 37% and 15.5% respectively. Such behavioural changes could help save costs of travelling to bank branches.
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