Even though cash remains the preferred mode of payment in Thailand, its share is on a gradual decline in light of efforts by the government to promote electronic payments under its National e-Payment Master Plan, according to a report by the data and analytics company GlobalData.
The share of cash in overall payment volume is expected to decline from 85.6% in 2018 to 77.8% in 2022, according to the company's new report, "Thailand Cards & Payments: Opportunities and Risks to 2022". During the same period, total card payment value is expected to increase from 1.8 trillion baht to 2.7 trillion.
"The government's attempts to promote non-cash payments such as the introduction of faster payments and QR codes, mandatory issuance of EMV (embedded microchip) cards and the push for point-of-sale (POS) adoption are contributing to the growth of electronic payments," said Nikhil Reddy, payments analyst at GlobalData.
As part of the master plan, the government launched a nationwide programme in 2017 to drive POS installation among smaller retailers and government agencies. Merchants were offered benefits such as a tax deduction, fee waivers on POS issuance and rental, and a reduction on merchant discount rates.
In 2016, the Bank of Thailand launched a faster payment system, PromptPay, allowing users to make peer-to-peer transfers and payments through their mobile phones using only the recipient's mobile number or national ID number. As of December 2018, 46.5 million users, or 68% of the country's population, had registered for the system.
In August 2017, the central bank collaborated with American Express, JCB International, Mastercard, UnionPay, Visa and other financial services providers to introduce the Thai QR Code Payment standard, with an aim to create an open, interoperable payments infrastructure.
"Though cash will continue to remain dominant in Thailand, these measures will certainly propel electronic payments, further reducing the usage of cash over the next five years," said Mr Reddy.
