Bangkok--24 Feb--Bangkok Bank
Thai Payment Network (TPN) has partnered with UnionPay International (UPI) to launch Thailand's first local card network for processing electronic payments to support the Bank of Thailand's (BOT) policy that all payments by domestically-issued debit cards must be processed locally. This move will also encourage the use of electronic payments and provide benefits to merchants and consumers as Thailand heads towards a "cashless society".
TPN, a joint venture between Thai banks and UPI, will process local payments, provide a switching service for processing payments with UnionPay debit cards, and establish a new payment network system for electronic payments in Thailand. The establishment of TPN is also in line with the BOT's policy which requires all debit and ATM cards to be protected with a secure chip by the middle of 2016.
The key benefits of the local payment network include lower fees for merchants and banks, improved security for newly-issued cards, and greater acceptance by big and small merchants alike, thus making payments more convenient for consumers.
Chairman of TPN, Mr. Shoke Na Ranong, said: "The local card scheme will be a win-win for all stakeholders. Merchants and shopkeepers will have less risk as they will not need to handle so much cash, consumers will be able to make payments easily and conveniently, the government will save on administration costs, and financial service providers will be able to provide e-payments at lower fees."
"Debit card transactions account for only 2% of the total value of cash withdrawals from ATMs. Merchants have been discouraged from accepting debit cards due to the high transaction fees while cardholders are not confident about using them and have concerns about the security of the magnetic stripe. These problems will be addressed with the launch of TPN. Since the cost of making electronic payments will be lower, people will be able to use e-payments for very small purchases. There will also be a high level of security through the use of a 'chip and PIN' system with a 6-digit PIN", added Mr. Shoke Na Ranong.
The technology for the TPN system is being provided by UPI, a global payment network with the largest cardholder base in the world.
Mr. Ge Huayong, Chairman of China UnionPay, said: "The construction of a local switching network in partnership with Thailand's major financial institutions is another milestone of Sino-Thailand financial cooperation. We are ready to introduce many years of experience in UnionPay card business to Thailand through the development of TPN and other feasible ways to support the growth of the local e-payment market."
"We will promote bankcard payment in more fields, including smaller merchants, and public utilities, and boost local payment services. We will continue to take advantage of UnionPay's card business to participate in the payment infrastructure construction and industry upgrading for Thailand. In this way, we will enhance the service quality and support the ability of UnionPay network constantly," added Mr. Ge Huayong.
UPI and Bangkok Bank are TPN's initial shareholders while three other Thai commercial banks – Kasikornbank, Krung Thai Bank and Siam Commercial Bank – have signed a Memorandum of Understanding expressing their interest in becoming TPN shareholders.