Bloomberg reported that a new digital payments system debuting in Thailand will help banks save as much as $2 billion across 10 years tied to limited cash use.
As noted by the newswire, those savings stem from the PromptPay service, which will more than help offset revenues lost from smaller transaction fees. There are expected to be 30 million registrations for PromptPay through the end of the year. The network is being rolled out this quarter and may help boost economic growth, according to industry observers. The initiative comes as neighbors, such as Singapore and India, are rolling out similar programs. The cashless systems seek to weed out black market transactions.
Upon the adoption of PromptPay, money transfers below a threshold of 5,000 baht are free, while scaling up to larger transactions, the transaction costs are at topped out at 10 baht. That’s far less than the 25-baht to 120-baht interbank levies on transfers up to 100,000 baht. In total, money transfer fees were 2.5 percent of revenues in the Thai banking sector.
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