BOT joins Asean peers in rush for payments scheme
THE Bank of Thailand (BOT) is playing a role in speeding up the introduction of a central payment system that will be rolled out across the Asean region.
Kukkong Ruckphaopunt, executive vice president of Bangkok Bank cited BOT governor Veerathai Santiprabhob as saying that a taskforce had been set up to guide the establishment of the system – based on QR codes – for use in all 10 Asean countries.
Veerathai had been attending a meeting to advance the goal of payment connectivity in the region.
Commercial banks would be invited to join the taskforce later, Kukkong quoted Veerathai as saying.
The BOT is expected to call in commercial banks for discussions on the project later. If the arrangements are finalised quickly, the QR code payment system would likely be launched late this year, Kukkong said.
For the system to work, Asean countries must agree on the way that payment information will be transmitted under a uniform standard, which factors in the different currencies, the range of merchants and the codes that will be used.
Officials need to decide whether the central interbank payment system will use ITMX or sponsoring banks, while rules for business also must be finalised.
Once the QR code payment system is finalised, the related parties can determine a logo and a name for the system that will apply in all Asean countries. The logo would have a technical function in enabling scans to be made for payments, in a similar way to how the PromptPay logo with its QR code can be scanned by users, with the payment process recognised by all of Thailand’s banks.
A number of Thai banks have developed international payment systems, but these are limited to bilateral payments.
If the central payment system is developed, all banks in Thailand, including Bangkok Bank, will have the capability for customers to scan the QR codes of banks in Singapore, Vietnam or Indonesia through their mobile banking platforms to enable the payments
“An Asean QR code will be based on bank accounts. When transactions are made, money will be withdrawn from accounts directly, which could prompt competition with card providers such as MasterCard, Visa, American Express and JCB,” Kukkong said.
Without cards, the system will carry no cost, similar to the QR code-based system in use on PromptPay.
To cope with an estimated rise in mobile banking transactions among Asean countries, each bank now has high capabilities and the planned Asean QR code is expected to boost transactions by about 10-20 per cent in an initial period, Kukkong said
Veerathai said that the planned payment system would draw on existing technology that is being developed for Asean payment connectivity. This means that the system will cost less than would be the case if a new system had to be started from scratch, let alone the additional time that this would entail, he said.
The QR code system will enable fund transfers that make use of blockchain technology, making an Asean-wide system more efficient, he said.
“It’s not necessary to set up new payment infrastructure for inter-payment in 10 Asean countries,” he said. “That could take two to three years to complete and such a system could be outdated by then.
“Therefore, what we are doing is to develop existing technology for the application of connectivity. Developing the payment system on the existing technology will help determine business rules and make it easier to enable agreement among the parties.”