2025 Thailand payment trends: a cashless society taking shape?

The development of Thailand's payments industry in 2025 does show an accelerated transition to a cashless society, but the process will be characterised by "phases and diversifications". The following is a professional analysis of the key drivers, challenges and manifestations:

I. Core drivers

1. Strong policy impetus

• The Bank of Thailand's (BOT) National e-Payment Master Plan sets a target of 75% by 2025.
• PromptPay instant payment system coverage has reached 90% (as of 2023), with average daily transactions exceeding 30 million
• Fiscal incentives such as VAT rebates continue to spur merchant-side acceptance transformation

2. Infrastructure leapfrogging

• Unified Standard for QR Codes (Thai QR) has achieved omni-channel interoperability
• Digital banking licence issuance prompts traditional banks to upgrade digitally (e.g. Kasikornbank's K+APP user growth of 40% annually)
• NBTC data shows 5G coverage will reach 85% by 2024Q4, providing underlying support for real-time payments

3. Structural shifts in consumer behaviour

• Grab-Thailand data: share of cash transactions in dining scene drops from 62% to 29% after epidemic

II. Current development bottlenecks

1. The digital divide between urban and rural areas remains significant

   • Thailand's Electronic Transactions Development Authority (ETDA) 2023 report reveals that Bangkok's cashless payment penetration reached 781 TP3T, compared to only 311 TP3T in rural areas in the Northeast
   • Cash dependency of older age group (60+) is as high as 67% (Krungthai Bank research data)

2. Cost pressures on the merchant side

   • MSMEs are responsible for payment gateway fees of 2-31 TP3T (VISA/Mastercard rates are still higher than PromptPay's 0.51 TP3T)
   • Only 42% of street vendors support e-payment, with equipment procurement and maintenance being the main obstacles, according to central bank data

3. Cross-border Payment Short Board

   • QR code interconnection with Malaysia/Singapore is progressing slowly and currently only covers 15% for border trade scenarios
   • Exchange Control Restrictions Lead to Long T+3 Fund Settlement Cycle for Alipay/WeChat Payments

III. Key trend forecasts for 2025

(1) Accelerated technology convergence

• Biometric payments explode:
  Facial recognition transactions are expected to grow at an average annual rate of 1,20% (as forecast by Krungsri Research), and 7-11 has already piloted the "Pay with a Smile" system.
• CBDC commercial landing:
  Retail-ready digital baht to complete sandbox testing, with first application scenarios including BTS LRT auto-deduction and supply chain finance for bulk agricultural products

(2) Scene Deepening and Expansion

(3) Restructuring of the regulatory framework

• Digital Asset Payments Bill may allow stablecoins to be used for everyday spending (subject to 100% baht reserve requirement)
• FTI Association is pushing for the inclusion of electronic invoices in the tax credit voucher system

IV. Business Insights

1. Acquirer opportunities:
   Development of integrated smart POS terminals (supporting Thai QR + bank card + NFC), which can reduce customer acquisition costs for target catering merchants by TP3T401 (as measured by Kasikorn Securities)

2. Blue Ocean for Cross-Border Services:
   Optimise aggregated collection solutions for Chinese tourists - Currently, there is still 23 percentage points of room for improvement in the acceptance rate of UnionPay QR codes in duty-free shops

It is recommended to keep an eye on the "Guidelines on Cross-Border Payments for Non-Banking Institutions" to be issued by Thailand's SEC in Q4, which will be an important policy window for foreign investors. Overall, the "hybrid payment ecosystem" will continue to exist in the medium term, but the cashless inflection point may come after 2026.