BANGKOK -- Leading Thai banks will in October introduce low- or no-cost money transfers using government ID numbers or registered phone numbers, boosting efforts to build up the digital economy.
The transfer service, dubbed PromptPay, will initially include Bangkok Bank, Kasikornbank and the 13 other commercial banks making up the Thai Bankers' Association (TBA), along with four state banks -- the Government Savings Bank, Government Housing Bank, Islamic Bank of Thailand and Bank for Agriculture and Agricultural Cooperatives.
National ITMX, a payment services coordinator counting the 19 partners among its shareholders, will administer the system. The members aim to grow their network going forward, citing benefits including convenience and drastically lower transfer fees.
Users of the service will begin by registering their 13-digit ID number, which every Thai is assigned at birth, or mobile phone number with PromptPay, linking that identifier to a bank account. Those numbers can then be used nationwide at branches or ATMs of participating banks, or through smartphone applications, to send funds to that user.
The low cost of sending money is perhaps the service's largest draw. Amounts under 5,000 baht ($141) are free to send between participating banks. Even transfers of more than 100,000 baht cost at most 10 baht -- less than a 10th of the current rate.
Along with cutting fees, the system simplifies the act of sending money, keeping users from having to look up account numbers, TBA Chairman Predee Daochai said, predicting that such benefits will help attract users.
Existing online money-sending services relying on credit cards are relatively untrusted in Thailand, posing a major hurdle to growth in the e-commerce sector. PromptPay could be a solution: the TBA plans to enable payments between companies and individuals as soon as the end of this year.
Yet frequent ATM hacking and other fraud in Thailand could be a barrier to the new system as well. "I'll have to wait and see," one woman in her 50s said about plans to use PromptPay. The TBA insists it is doing everything it can to ensure the service is secure. But the organization will need to dispel user fears before the system can take off on a larger scale.
Thailand's military junta is in the midst of a broad push to switch out labor-intensive industry with high-value-added industry as the core of the country's economy. Plans to promote the so-called digital economy through development of large-scale information technology infrastructure -- exemplified by PromptPay -- are a key part of those efforts.
Thailand decided early this month to replace the current Information and Communication Technology Ministry with the Ministry of Digital Economy and Society come September. The new agency is aimed at improving the lives of the public and spurring the development of new industries by encouraging the spread of digital technology.