The government's national e-payment project will boost economic efficiency, reduce waste and corruption and help improve access to financial services for small businesses and the poor, according to Finance Minister Apisak Tantivorawong.
"If successful, [the e-payment system] will be the first in the region. Rather than follow others, Thailand will take the lead," he said at the Bangkok Post Conference on Friday.
The e-payments initiative aims to shift the Thai economy away from cash-and-paper-based transactions toward electronic ones. Under the system, citizens will be given "e-wallets" tied to their national ID cards or mobile phones, which can then be used to make and receive payments with public agencies and private companies.
Local banks will be tasked with outfitting payment terminals at registered companies and retailers nationwide. State agencies, which already process around 70% of payments electronically, will be directed to handle all financial transactions electronically.
Mr Apisak gives his address on the government's e-payment development at the 'Bangkok Post' Conference entitled 'E-payments: Driving Thailand's Economy Forward' held yesterday at the InterContinental Bangkok Hotel.
Tax authorities also have been ordered to upgrade their computer systems to enable the management of personal income, corporate, value-added, withholding and other taxes through the system. Millions of Thais have already signed up for the e-wallet service, known as PromptPay.
Mr Apisak, in his keynote address, said small companies and the poor may well be the biggest beneficiaries from the transition from a cash-based society to a cashless one.
"Many of course already use e-payment systems, whether ATMs, credit cards, mobile banking or online banking services. But it's mostly the middle- to upper-class," he said.
"With an e-wallet, those who now cannot access financial services will be able to do so. Those who have limited physical access to a bank branch can access electronically. So consumers gain convenience, we reduce inequality and financial inclusion improves."
Several hundred business leaders, payment experts and policymakers attended the Post Group conference yesterday afternoon, titled "E-Payments: Driving Thailand's Economy Forward" and held at the InterContinental Bangkok Hotel.
Mr Apisak said 1.58 million low-income residents have registered, and urged others to join the system during the sign-up period, which began earlier this month and runs until Aug 15.
"It is the poor who have the most to potentially gain. Going forward, if the government offers social subsidies, it will be through the e-payments system," he said.
Subsidies such as free bus and train fares for the urban poor could in the future be facilitated solely through e-payments. Doing so would also help increase efficiency and value for the government and taxpayers as well, as public support would be means-tested and go to those most in need.
Mr Apisak said an incentive scheme would be launched to encourage the public and small businesses to adopt the system, with monthly prizes given to end-users and retailers.
"Imagine a noodle stall winning a one-million-baht prize. That's better than the lottery," he joked.
People pack Grand Ballroom of InterContinental Bangkok Hotel for the Bangkok Post Conference on "E-payments: Driving Thailand's Economy Forward." (Photo by Phrakirt Juntawong)
Mr Apisak said for businesses, a shift to e-payments would help reduce operating expenses and improve their own efficiency, particularly small firms now lacking the management or accounting resources of larger companies. "E-payments will help you see where the money goes. Every baht, every satang, will go to your own account," he said.
With the system aimed to manage low-value transactions such as taxi fares or retail purchases, transaction costs will be kept low.
"With the system having to handle transactions of say 20 or 30 baht, processing fees have to be kept low, say a satang," Mr Apisak said, adding that banks would benefit despite the lower fees through added transaction volume and a larger user base.
Under the programme, all registered companies nationwide will be tied into the e-payments system and equipped with a processing terminal by 2019.
The Thai banking system could meanwhile potentially save 40 to 50 billion baht per year by reducing logistics and operating expenses involved in handling, processing and maintaining cash.
Mr Apisak, a former chief executive of Krungthai Bank, said the project would create a payments "superhighway" giving equal access to large and small banks, as well as to non-bank financial companies, spurring new innovation and competition within the economy to the benefit of consumers.
"Now, small banks cannot compete in terms of their network with the larger banks. But with equal access to a road built by the government, banks will be forced to compete based on the quality of their products [rather than scale]," he said.
The payments infrastructure could also be extended for use overseas through linkages with Cambodia, Laos, Myanmar and Vietnam, he added.