COMMERCIAL banks are rushing to seek out business partnerships with Thailand Post Co to capture opportunities from the boom in online shopping.
Kasikornbank (KBank) and Thailand Post Co, a state-owned enterprise, yesterday sealed a business deal that saw one of the country’s biggest banks appoint the postal operator as a banking agent.
KBank became the first of the large banks to enter such an arrangement with Thailand Post.
“We aim to service 250,000 online vendors across the country under this deal, which will allow them to send out their parcels and deposit money with Thailand Post's branches across the country,” said Patchara Samalapa, KBank’s president.
Patchara indicated that Kasikornbank was looking at broader gains from the initiative, saying that with the bank’s large deposit base it did not need to attract more deposits.
In the first stage of service, the bank’s customers can deposit up to Bt20,000 per transaction – or up to Bt40,000 a day – via 964 Thailand Post branches. The service costs Bt10 until the end of the year, before rising to Bt20.
The bank targets 150,000 transactions derived from the banking agent channel by the end of 2018. The volume of transactions is expected to reach 600,000 in the first three years of operation.
Cash withdrawal and money transfer services would be offered next year should the central bank give the green light, Patchara said.
“The use of banking agents is cheaper for us than setting up full bank branches nationwide, but that does not mean than we plan to shut down some bank branches," he said.
Smorn Terdthampiboon, president of Thailand Post, said that doing business with Kasikornbank would improve its logistics business in the face of more competitors entering in the market.
“We did not set out to make more revenue from it since it is not our core business, but we aim to provide a better service for our customers,” she said.
Some seven small commercial banks have appointed Thailand Post as a banking agent since 2011, and its Bank@Post service has grown about 13 per cent annually.
Smorn said the logistics business in Thailand is growing due to the increased popularity of shopping online.
Traditionally, Thailand Post provided a basic service of sending letter from senders to receivers. Now, the dispatch of goods accounts for the biggest share of the agency’s business, at more than 40 per cent. Mail delivery makes up about 30 per cent, with the rest of the revenue from money services and sales of parcel packaging items and stamps, she said.
Thailand Post has 1,300 branches nationwide and 3,000 more come under its postal network operated by private entities.
Parcel delivery has grown about 20 to 30 per cent annually, as people were shopping online more, Smorn said.
Some other large banks had also sought business partnerships with Thailand Post, she added. Thailand Post targets revenue of Bt30 billion this year, up from Bt25 billion last year. Last year it made a profit of Bt4.2 billion and this is expected to rise to Bt4.5 billion this year, Smorn said.