Some 60 million magnetic-stripe ATM and debit cards issued by local commercial banks and circulating in the market will be upgraded to chip-embedded cards by the end of 2019, says a senior central bank official.
An estimated 90% of ATMs nationwide will support chip-embedded cards by May 16, but the machines still support magnetic-stripe cards for those who hold only that type, said Tongurai Limpiti, a deputy governor of the Bank of Thailand.
Thailand will emerge as the third county in Asean to have mandatory chip-embedded ATM and debit cards following Malaysia in 2004 and Singapore in 2010.
Mandatory chip-embedded card issuance for debit and ATM cards will come into effect on May 16, according to the central bank's schedule, in a bid to prevent card fraud such as ATM skimming.
As chip-integrated plastic cards are much less susceptible to skimming and other types of fraud, banks are urging customers to switch from magnetic-stripe cards even though chip-embedded cards can only be used with the ATM terminals of issuing banks at present.
Bangkok Bank (BBL) is the only bank currently offering chip-embedded ATM and debit cards.
Facilitating the migration from a cash-based society to a cashless society under the central bank's e-payment policy is another reason for shifting to chip-enabled cards.
The cashless era would help reduce operational costs in managing cash. For instance, the number of banknotes printed by the Bank of Thailand fell to 2 billion last year from around 3 billion a year in the past.
In the meantime, local large commercial banks have insisted current fee rates will remain unchanged, though they need to allocate huge budgets to invest in chip-embedded card technology.
Preedee Daochai, president of the Thai Bankers' Association (TBA), said the fee rates of ATM and debit cards are different depending on their features.
Banks normally charge 100-300 baht as entry and annual fees.
At present, 40 million ATM and debit cards, or two-thirds of the total cards issued by commercial banks, have been issued by the country's four big players -- BBL, Krungthai Bank, Siam Commercial Bank (SCB) and Kasikornbank.
Each big bank has around 10 million ATM and debit cards.
Fee rates will be maintained despite the transition from the magnetic-stripe cards to chip-embedded ones.
To prepare for the chip-embedded cards, the banking industry has invested billions of baht in back office systems, chip-embedded card issuance, electronic data capture as well as in ITMX Co, a payment service provider that is under the TBA.
Phanporn Kongyingyong, first executive vice-president of SCB, said 87% of the bank's 9,863 ATMs nationwide are able to handle transactions involving chip-embedded ATM cards.
The bank has 10.3 million ATM and debit cards in total.
Banks currently waive fees for three transactions per month using another bank's ATMs to make cash withdrawals and balance inquiries and impose a three-baht fee for all further transactions. Banks also charge 20-25 baht per money transfer using another bank's ATM terminal.