Name
Global FinTech Guide
Country _ Name
Thailand
SectionTitle
Payment services
Body
FinTechs belonging to this category offer alternative payment services which are supposed to provide a faster and cheaper way for national, European, and international payments for private and business customers by using new technologies.

For example, payment service providers hereby offer solutions to easily integrate several payment services in online shops.

Some FinTechs furthermore provide real cash register systems and online-reservation solutions for restaurants and shops providing their own payment services or making use of the payment services of FinTechs described above.

Introduction

Attitude of the country towards modern payment services

Digital payment services are among the fastest-growing industries in Thailand. The Thai government has put forward the National E-payment Masterplan, which consists of five (5) key pillars: (1) payment infrastructure development; (2) e-tax system; (3) e-social welfare; (4) financial inclusion; and (5) cashless society. Overall, the social and political climate for digital payment in Thailand is strongly positive.

Legal affairs

Obligations and requirements to provide payment services or ancillary services described above

On 18 October 2017, the new Payment Systems Act B.E. 2560 (2017) was published in the Government Gazette, and the law came into effect 180 days later on 16 April 2018. This legislation reclassifies payment systems and services into three categories: (1) highly important payment systems such as BAHTNET and the Imaged Check Clearing and Archive System (ICAS); (2) designated payment systems; and (3) designated payment services.

“Highly important payment systems” are payment systems established and operated by the Bank of Thailand (BOT) only. Financial and nonfinancial institutions may engage in Designated Payment Systems or Designated Payment Services, but they need to apply for registration or a license from the Ministry of Finance (MOF) under the BOT recommendation. 

Designated Payment Systems

Under the Ministry of Finance Notification Re: Determining Designated Payment Systems, “Designated Payment Systems” include inter-institution fund transfer systems, payment card networks, and settlement systems with one or more of the following characteristics:

  1. Supporting transactions for the overall financial and economic systems of the country;
  2. Connecting and settling through the BAHTNET system, which is part of the primary national infrastructure; or 
  3. Having more than three (3) users, who may pose risks to the overall financial and economic system of the country or affect the confidence of the public or the stability of the payment system.

Designated Payment Services

Under the Ministry of Finance Notification Re: Determining Designated Payment Services, payment system businesses that provide any of the following services are deemed to be “Designated Payment Services,” operation of which requires a license from (or registration with) the BOT:

  1. Services relating to credit cards, debit cards, and ATM cards, except for cards used to settle payments for goods or services under the same business, or under the same franchise system.
  2. Electronic money services, subject to certain exemptions.
  3. Electronic payment services, including: acquiring a business; payment facilitation; and authorised payment reception service.
  4. Electronic fund transfers and money remittance.

The payment systems and services under these three (3) categories are tabulated below: 

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Highly Important 
Payment Systems
 Designated Payment  
Systems 		 Designated Payment Services
 BAHTNET  Inter-institution fund transfer system  Credit, debit, and ATM card services
 Imaged Cheque Clearing and Archive System (ICAS)  Payment card network  Electronic money services
   Settlement system  Electronic payment services 
- Acquiring business 
- Payment facilitation;
- Authorised payment reception service;
     Electronic funds transfer and money remittance


Generally, any person wishing to operate a payment system or service in Thailand must incorporate a local entity in order to apply for a registration or licence. A local entity must have fully paid-up capital of THB 10–200 million (approx. USD 298,000–5.95 million), depending on the business type. Foreign entities are permitted to engage in the business of payment card network only. Reduction of the paid-up capital is prohibited unless the BOT grants approval as such.

There is no application, registration, or license fee.

Additional comments regarding the legal situation for payment services or what FinTech’s must be aware of in this business area

The Thai government and the BOT provide favourable business opportunities for payment services in Thailand, yet the BOT has adopted stringent requirements and regulations to supervise the payment service provider with the aim of protecting retail customers. Minimum requirements for operation include good governance, risk management, consumer protection, security standard, business continuity plan and know-your-customer (KYC) policies. In addition, payment transaction businesses can be subject to many other legal requirements, such as exchange control regulations, which require additional licenses or registrations. The application process may take a couple of months, and thus business operators should take these requirements and application timeline into account.



Economic conditions

Market size for payment services and biggest payment service providers

According to the BOT, as of December 2021, e-payment usage accounted for 312 transactions per person per year, and there were 36.3 million transactions per day on average. Over 123 million accounts have been linked to internet and mobile banking services and there were 116.2 million e-money accounts. The number of credit and debit cards was 25.1 million and 64.8 million cards, respectively. There were about 914,800 electronic data capture (EDC) terminals in service. 68.6 million IDs were registered for PromptPay, a service in Thailand’s payment infrastructure development project that enables users to easily receive and transfer funds using Thailand residents’ ID or mobile phone number instead of a bank account number, via electronic channels (e.g. internet banking, mobile banking, and ATMs). PromptPay service is part of the payment infrastructure development project of Thailand.

The market for payment services is relatively fragmented and highly competitive. The BOT publishes the statistical data about the use of payment services in each
category on its official website from time to time, but the market data of each service providers have not been disclosed.

Additional comments regarding the economic situation for payment services or what FinTech’s must be aware of in this business area

N/A.

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