When out at any shopping mall, it's common for consumers to use anything from credit cards to e-wallets when making purchases nowadays. But when it comes to traditional markets, or talat nat, found faraway from these commercial venues, it's only been recently that one can catch sight of these types of transactions taking place.
Several vendors at these markets now feature a sign with a symbol of a commercial bank and QR code on their stalls. No longer is it uncommon to see a customer taking out their mobile phone to pay for street food.
Developments like these suggest the shift towards a cashless society is taking place perhaps faster than once expected.
"I like mobile payment systems," Boonwadee Ketsri, a food vendor at a small market along Ram Intra Road, Bangkok, says. "It's easy and comfortable for me as there's no need to find smaller banknotes or coins for change."
At her stall, some customers pay for food priced under 100 baht with 1,000-baht banknotes. Although still open to accepting cash, Ms Boonwadee admits it can be a struggle to find the exact change sometimes.
Although mobile payment systems are not yet the norm, she says the trend is only bound to get more popular.
A woman who asks not be named says she now uses an e-wallet to buy food due to the ease and convenience of the service. Several vendors have started offering such payment methods, and she says she would like to see more do the same.
"I used to pay for food with large banknotes but a vendor would sometimes have no small ones to change it with, meaning I had to go buy goods from other vendors to change my notes," she said. "It would be a hassle."
She adds that her son taught her to use the mobile application.
Although many have expressed concerns over mobile payment systems due to security risks, analysts expect that attitude to change as disruption technology forces commercial banks to broaden their services and adapt to digital changes.
COMPETITION ON
This year has seen fierce competition between commercial banks to create the most digital-friendly services. Besides competing to develop the best mobile banking application, they have also been embroiled in a battle to offer the lowest service fees.
Thailand's four largest banks -- Bangkok Bank (BBL), Siam Commercial Bank (SCB), Krungthai Bank (KTB) and Kasikornbank (KBank) -- recently surprised customers by offering free transactions on internet and mobile banking platforms.
BBL, SCB and KBank have permanently removed fees for money transfers, bill payments and top-up services through their digital platforms, while KTB will offer similarly free services until the end of the year.
These banks, known as the "Big Four", have forced other banks to follow suit, including the Bank of Ayudhya (BAY), which now offers cash back for bill payments on its online platforms.
The state-run Government Savings Bank (GSB) has also recently decided to scrap its online banking transaction fees.
Besides competing with each other, banks must compete with online payment platform giants like Alipay.
Monitoring consumers' financial data and behaviour is a key strategy for banks seeking to implement digital changes.
Though banks have suffered income losses from slashing fees, banks expect that the competition will help in the long term by expanding their customer base and the volume of online banking transactions.
The removal of fees is one step in banks' long-term plan to migrate transactions of traditional payment venues to digital ones.
KBank, the industry's leader in digital banking with eight million users on its mobile app KPlus, is seeking to expand its user base to 10 million by the end of the year.
In addition, it aims to increase online transactions by six million by the year's halfway point.
SCB, second to KBank in online banking popularity with its mobile app SCB Easy, further seeks to expand its user base from the current 6.5 million to 10 million by the end of the year. The bank drew 17,000 new users after rolling out its no fee policy on March 26. Of these new online banking users, several were new-to-the-bank customers.
CASHING IN
Nussara Leepatamakul, 44, a durian wholesaler based in Rayong province, says that commercial banks' move to offer free online banking transactions is a positive one. The cancellation of digital transaction fees has made her business more convenient.
breaking bank: A customer has a QR code scanned from a smart phone at a grocery store in Bangkok. Thailand has stepped up efforts to curb the use of cash, with banks following suit. PHOTO: BLOOMBERG
"I used to have to carry cash worth several million baht to buy durians from farmers," she says. "It was very inconvenient. Most importantly, I worried a lot about the security of carrying so much cash on hand."
With cash trading, she had to continually count stacks of banknotes. Eventually, she decided to buy herself a bill counter, she says.
Later on, Ms Nussara asked her durian grower clients if they could open bank deposit accounts to simplify the process of transferring her money to them.
She further persuaded the trading partners to apply for mobile banking accounts to facilitate more trading.
Most of her partners agreed.
"I also asked my trading partners to start using mobile banking apps to facilitate transactions. The no-fee services encouraged them to go digital," she said.
For Ms Nussara, the security and convenience of online platforms is most important to her.
"Now when I carry cash in my purse, it's no more than 5,000 baht," she said. "That compares to the several hundreds of thousands of baht I used to carry around in the past.
"The cash stock of my business also substantially decreased to only around hundreds of thousands of baht from several millions of baht recently.
"Most importantly, though, I have no more concerns about security," she stresses.
On digital payment platforms, Ms Nussara says she can do banking transactions anywhere at any time. Currently, she visits a bank branch only a few times a month, compared to the several visits she had to pay daily previously.
She adds she could spend anywhere between 30 minutes to half a day visiting the branches previously.
Ms Nussara has benefited from the rise of digital banking. Fee or no fees, she says what matters to her most about the change is the convenience and security of not having to carry around large sums of cash.
As for Krit Soontornpiwat, 30, who works at private company in Bangkok, he says he only rarely visits bank branches after moving to a digital payment platform.
Mr Krit's workplace is in the Silom area, where lots of merchants use PromptPay services. He says the majority of his friends and colleagues also use mobile banking now.
"If you forget your smart phone when going to work, that's no good," he said. "So I've got to go back home to get it. But if I forget my wallet, it doesn't make me worry because I can pay for things via mobile banking."
AT WHOSE SERVICE?
Despite the pressure on several sectors to go digital, some consumers hold a preference for traditional banking.
Usawadee Poolpipat, 40, the owner of a food delivery service, says she only ever does her banking at physical branches, something that suits her lifestyle.
brought up to code: An advertisement board displaying a QR code is seen as a vendor works at a market in Bangkok. Street vendors are adapting to the digital age by providing mobile payment services. PHOTO: REUTERS
She usually gets cash from selling food, which she uses for her own purchases. She goes to a bank branch no more than twice a month for money deposits or cash withdrawals at the bank counters. She mostly goes to banks at shopping malls.
"I don't think that it's inconvenient to go to bank branches. With my freelance career and slow life upcountry, I have enough time. So lifestyle is a key factor for me in choosing this mode of banking," she says.
Ms Usawadee has followed the developments on online banking services, including PromptPay, in the news. Despite that, she says she is not drawn to digital banking.
She has long relied on face-to-face services from bank staff members instead of machines and devices. As a result, she says she is more at ease interacting with a human when conducting banking, even if it comes with higher costs.
A lack of familiarity with technology and quality of internet connection also serve as barriers to the accessibility of online banking services to her.
Still, if Ms Usawadee has to do several transactions in a month and pays higher fees when going to bank branches, she says she will consider moving to digital banking.
Despite the fact the lack of fees has affected revenue, commercial banks are not expected to raise transaction fees at physical branches to offset this, says Predee Daochai, chairman of the Thai Bankers Association.
"Banks need to serve all its customers who have different demands in financial products and services," Mr Predee said.
"For instance, banks still offer cheque services, though it is a loss-making service. However, the service demand has declined significantly over the past several years."
PROMPT REACTION
PromptPay, the electronic payment service under the Thai government's e-payment plan, has stopped charging for online banking transactions.
PromptPay offers free money transfers for up to 5,000 baht, two baht for over 5,000 baht, 5 baht for up to 100,000 baht and finally, 10 baht for transfers over 100,000 baht.
According to Kasikorn Research Centre, fees from PromptPay money transfers account for between 7 to 10% of commercial banks' overall fee income.
A source from the banking industry says the revenue may decline as commercial banks compete to lower their fees over time.
short on cash: Six major Thai banks have joined forces to gear up for the New Chapter Of Cashless Life project. Thailand's banks have recently competed to drop fees on digital payment services to draw in customers. PHOTO: WISIT THAMNGERN
Since PromptPay was launched in January last year, customers have reported overall satisfaction with the platform, especially in the area of consumer-to-consumer service.
According to the Bank of Thailand (BoT), PromptPay registration numbers reached 39.3 million in February, 26.7 million of which were registered through ID card numbers and the remaining 12.6 which registered through mobile phone numbers. The total transactions of PromptPay electronic payments amounted to 127 million out of a total value of 409 billion baht.
PromptPay's average ticket size fell to 3,500-3,800 baht per transaction from 5,000-6,000 when the service went live.
The drop reflects the fact the service is being accessed by a wider pool of people, says Siritida Panomwan Na Ayudhya, the central bank's deputy governor for payment system policy and financial technology.
Convenience is another key point behind consumers' switch to the rise of PromptPay transactions.
In PromptPay's first year of operating, the service showed signs of positive response among customers. In its second year, however, more focus is set to be paid on corporate PromptPay, says Ms Siritada.
Of the 490 billion baht of money transfers in PromptPay in last year, transactions in corporate PromptPay, or business transactions, represented under 10%.
Ms Siritida says the figure should increase in the service's second year.
She adds that part of this plan has businesses adjust internal operations and data linkages with e-payment systems to increase corporate PromptPay transactions.
In the meantime, PromptPay's transactions via ATMs are expected to increase alongside online transactions as some customers still prefer the familiarity.
Overall, mobile banking transactions are expected to reach 900 million transactions this year, a significant increase from below the 600 million transactions last year.
The total number of branches increased slightly to 6,789 at the end of February from 6,784 at the end of last year, but declined from 7,016 at the end of 2016.
paying off: Thailand is the third country where Shell has started to offer QR payment services via the Siam Commercial Bank Easy Cashier, following Britain and the Netherlands. PHOTO: PRAKRIT CHANTAWONG