Kasikornbank's (KBank's) deposit transactions through its banking agent, Thailand Post, have outpaced their target after only one month of the service.
Deposit transactions at Thailand Post's offices are averaging 1,000 a day, with values ranging from 2,000 to 3,000 baht, surpassing the bank's target of hundreds of deposits a day, said president Patchara Samalapa.
Online vendors living in rural or remote areas have been key customers, he said.
Even though deposits made through Thailand Post's offices have a transaction fee, customer demand remains strong because of convenience and cheaper fees than at bank branches, Mr Patchara said.
Typically banks' physical branches are located in the main districts of each province, requiring time and expense to travel there from rural areas.
Under a revenue-sharing agreement, KBank and Thailand Post charge a 20 baht fee per transaction for deposit service, evenly divided between the bank and the banking agent until year-end. Thailand Post offices also offer money transfer pickups via KBank, which will be extended to cash withdrawals by the end of this year.
The service is available at 964 Thailand Post offices nationwide, out of a total of 1,300 Thailand Post locations in the network.
Initially, each customer is allowed to deposit up to 20,000 baht per transaction and 40,000 baht per day. The country's third-largest lender by assets recently said it aimed for 600,000 deposit transactions made over three years at Thailand Post, which is the bank's first agent able to receive deposits.
Banking agents are expected to help banks access the unbanked and plug the gap before the full-scale adoption of digital banking.
"Even though the banking agent service generates fee income for the bank, we are focused on customer convenience rather than being a revenue source," Mr Patchara said. "The fee charged is based on operating costs for cash management incurred by both the bank and the partner."
He said the bank has discussed implementing digital financial transactions under Thailand Post's cash-and-carry business. The digital platform will increase security, offer more convenience and improve overall business efficiency.
Digital transactions will see higher usage of the banking agent channel, especially by online vendors, but KBank will spend more time studying digital adoption.
In Thailand, the business-to-consumer (B2C) e-commerce segment has continued to increase. B2C transactions were 703 billion baht in 2016, rising to 813 billion baht in 2017, and are expected to total 949 billion baht in 2019.
KBank is not concerned that other banks will also use Thailand Post as their banking agent in the future, Mr Patchara said.
KBank is the industry's No.1 provider of mobile banking service; the K Plus app has 9.4 million users. K Plus Shop, a mobile banking app for merchants, has 1.67 million users. Of the bank's total customer base of 15 million, 300,000 are online sellers.
KBANK shares closed Friday on the Stock Exchange of Thailand at 202 baht, down four baht, in trade worth 2.1 billion baht.