BOT to promote payments via debit card
The Bank of Thailand will seek tax incentives to promote the use of debit cards for payments rather than cash withdrawals."Charging debit cards for purchases of products and services will help reduce the use of cash and lower the cost of [printing] banknotes.
"We are in talks with the Revenue Department and believe that they will agree with us," Tongurai Limpiti, deputy governor for corporate support services and banknote management, said yesterday.
Charging accounts for only 1 per cent of total payments through debit cards.
Jaturong Jantarangs, senior director of the Payment Systems Policy Department, said the central bank was discussing with the Revenue Department about the method for data receiving and sending and linkages with commercial banks. The legal issues are also being reviewed.
A good example is South Korea, where debit cardholders charge for products and receive a tax reduction or credit. That has increased debit card spending in the country. Tongurai said service providers are required to implement a local switching system by September 1. So far, two to three companies, including National ITMX (NITX), have shown interest in providing the system.
"The announcement of the Electronic Transactions Commission requires the sending and receiving of data from debit cards issued and used in the country to be executed in the country only. Now, commercial banks and NITMX are testing the local switching system," he said.