Latest developments in payments policy from the Bank of Thailand

The Bank of Thailand (BOT) has continued to drive innovation and regulatory upgrades in the area of payment policy in recent years, and the following are the latest developments and key initiatives up to 2023:

1. Deepening the promotion of PromptPay, a quick payment system

  • cross-border interconnection: Thailand promotes QR code payment interconnections with ASEAN countries such as Malaysia and Indonesia (e.g. Thailand-Malaysia "PromptPay-DuitNow" linkage) to support real-time cross-border transfers.
  • Scenario Expansion: PromptPay has covered small and micro merchants, public transport (e.g. Bangkok BTS), and government welfare disbursement, with the number of users exceeding 60 million (accounting for more than 85% of the population).

2. Regulatory framework for digital currencies and stablecoins

  • Retail CBDC Pilot: BOT launched the retail side of the Digital Baht (DBT) test in 2023, focusing on assessing the feasibility and risk of micropayments.
  • Stablecoin Compliance: Require all issuers of baht-anchored stablecoins to be licensed by the BOT and to comply with reserve and anti-money laundering regulations.

3. Revision of the Payment Systems Bill

  • The new regulations bring non-banking institutions (e.g., e-wallets, third-party payment platforms) under stricter supervision:
    • Increased capital requirements.
    • Clarify that user funds need to be held in escrow in a designated bank account.
    • Enhanced data localisation and cyber security standards.

4. Upgrade of the National Prompt Settlement System (BAHTNET)

  • BAHTNET plans to be operational 24/7 by 2024, improving the efficiency of large corporate payments.

5. KYC/AML enhancements

  • digital identity verification: Promote the use of biometrics (e.g. facial recognition) for e-wallet account opening.

6. Cross-border payments cooperation and regional financial integration

  • ASEAN Quick Payment Linkage (QR Payment Linkage): The Bank of Thailand is actively promoting QR code payment interoperability with countries such as Singapore (PayNow) and Malaysia (DuitNow), with the goal of achieving seamless small cross-border transfers within the region.
  • Baht-RMB Direct Settlement: Work with China's central bank to encourage enterprises to use local currency settlements in bilateral trade and reduce dependence on the US dollar.

7. Regulatory upgrades for e-wallets and digital banking

  • Digital banking licences issued: BOT plans to issue the first three digital banking licences in 2024, allowing non-traditional financial institutions to offer deposit, loan and payment services. Applicants are required to meet strict capital requirements (minimum 5 billion baht).
  • E-wallet limit adjustment: Some e-wallets with lower KYC levels may face stricter controls on transaction caps to prevent money laundering risks.

8. Open Banking Framework Advancement

  • The BOT is developing API standards that require banks to securely share customer data (with user authorisation) to third-party service providers, facilitating competition and the development of innovative payment solutions.

9. Anti-fraud and consumer protection measures

  • SIM card binding real name system: All electronic payment accounts must be tied to a real-name authenticated mobile phone number.
  • Transaction Monitoring Enhancement: Large or unusual transfers will trigger additional verification steps (e.g. OTP + biometrics).

10. Integration of ESG with inclusive financial policies