Thailand’s digital economy has changed rapidly over the years. Traditional payment methods – such as cash and cheques – are losing ground, while digital payments are gaining popularity. Digital payments using banking applications or digital wallets can increase the convenience, speed, and security of transactions. They also can be better suited to the needs and lifestyles of modern customers.

Moreover, the government, private sector, and fintech companies have spearheaded positive changes to digital payment services, promoting an environment more conducive to cashless transactions. In this article, we review Thailand’s most common payment methods, including comparisons and current trends.

What’s in this article?

• Overview of payment methods in Thailand
  
• What payment methods are used in Thailand?
  
• How do traditional payment methods compare to digital payment methods?
  
• Digital payment trends in Thailand
  
• Summary of payment methods in Thailand
  

Overview of payment methods in Thailand

Payment methods in Thailand have changed to respond to customer needs. Cash and cheques were once the primary methods of paying for goods and services. However, with the expansion of technology, payments made with bank transfers, credit cards, and debit cards have become more popular, especially in and around Bangkok and other major cities. Thai Publica has collected historical transaction data from 2010-2016 and found that the use of cheques has gradually decreased from 9.24% to only 3%. Banks and financial institutions offer online and mobile banking, making transactions faster and more convenient.

In recent years, digital payment methods via quick response (QR) codes and digital wallets have become increasingly popular. This is in line with the growth of technology and the internet, making digital payments a more convenient, secure, and faster alternative to traditional payment methods. Digital payments are also more secure because of strict identity verification standards. The Thai government has also consistently supported digital spending projects, resulting in more customers turning to digital payments and a move towards an increasingly cashless society.

What payment methods are used in Thailand?

Here are the main traditional and digital payment methods used in Thailand:

Traditional payment methods

• Cash: This includes coins or banknotes used to pay for goods or services.
  
• Cheques: These are orders to pay money from the payer’s bank account to the payee. The payee can cash the cheque for the specified amount.
  
• Bank transfer: This involves a transfer from the payer’s bank account to the payee’s bank account.
  
• Bank draft: On this written document, the payer commits to paying a specified amount to the payee at a specified time.
  
• Money order: This is an order issued by a bank or post office to send money across regions or countries. The recipient can cash a specified amount – meaning this payment method is especially relevant if the recipient does not have access to a bank account.
  

Digital payment methods

• Mobile banking: These banking applications allow customers to use their mobile phones to transfer money, check their balances, and perform other transactions.
  
• PromptPay: This is a money transfer system that allows customers to receive and transfer money using the phone number or national identification number corresponding to a bank account. These transactions don’t incur a fee if under a specific threshold.
  
• Digital wallet: This online account allows customers to top up their wallets through various means. These include bank transfers, automated teller machines (ATMs) and various companies, such as TrueMoney, LINE Pay, and ShopeePay. A digital wallet can be used to make online or offline payments.
  
• QR code: Customers scan a vendor’s QR code through a bank application or digital wallet on a mobile phone. Then, they enter the amount and confirm the payment.
  
• Payment link: A payment link is created and sent to a customer through the communication channel used for the transaction. Clicking on this link allows the customer to access a secure online payment page. It also supports payment methods such as credit cards, PromptPay, and digital wallets.
  
• Credit and debit cards: These cards can be used for online and offline payments. For online payments, cardholders need to enter the card number, expiry date, and card verification value (CVV) code on the website or application to verify the payment. For offline payments, customers need to swipe or tap the card at the business’s electronic data capture (EDC) terminal, then sign or enter a personal identification number (PIN) to verify the payment.
  
• Buy now, pay later (BNPL): This payment system allows customers to purchase goods or services now and pay for them later in instalments, usually without interest or at a low interest rate.
  
• Prepaid card: You can add funds to this card and use it to pay for goods or services without being linked to a bank account. Examples include the Bangkok Mass Transit System (BTS) Rabbit Card, Mass Rapid Transit (MRT) card for the underground train, or mobile phone top-up cards.
  
• Payment gateway: Payment gateways include payments made to e-commerce websites or apps through Stripe and other digital platforms.
  

How do traditional payment methods compare to digital payment methods?

Compared to traditional payment methods, digital payment methods offer a clear advantage in terms of transaction speed. Traditional payments take longer to process, while digital payments require just a few seconds. Digital payments also cut the cost of cash handling because of lower interbank transfer fees. Some services, such as PromptPay, don’t incur any fees.

Ease of use

Using cash or cheques typically requires going to a physical store, bank, or payment point, which is time-consuming and, in the case of cash, might be risky. On the other hand, digital payments allow customers to complete transactions anywhere and anytime. They can use an application or different online system and don’t need to carry cash. Payments can be made using QR codes or in-app transfers.

Transaction speed

Transactions using traditional payment methods – such as bank transfers and cheques – can take several business days, especially in the case of international transactions. Digital payments, on the other hand, can be completed instantly or within minutes – this is the case of transfers through PromptPay or mobile banking applications.

Safety and security

Cash can be lost or stolen. Cheques can be forged. Security is much tighter for digital payments because of systems such as two-factor authentication and encryption. Banks and payment gateway providers are constantly developing new security features.

Stripe Radar detects and blocks fraud using machine learning, making it easy for you to isolate fraudulent actors from your customers. Radar’s algorithms quickly learn and adapt to evolving fraud patterns, and Dynamic 3D Secure automatically filters and blocks high-risk transactions, detecting and preventing fraud before it impacts your business.

Costs and fees

Some traditional payments can incur fees, such as cheque issuance fees or international transfer fees. Digital payments are typically fee-free up to a certain amount. This is the case for PromptPay, for example. This cost-saving feature contributes to their increasing popularity.

Opportunities for market expansion

Traditional businesses are typically limited in terms of the access and convenience they can offer their clients. Digital payments can help small businesses increase their earnings by allowing them to reach customers anywhere and anytime. They also help businesses penetrate more markets, including overseas.

A payment system such as Stripe Payments can support multiple currencies, allowing businesses to expand overseas and easily receive payments from international customers. Businesses can receive payments whether they’re in local currency or through automatic currency conversion, promoting a complete buying and selling experience.

Digital payment trends in Thailand

Payment methods in Thailand have changed significantly in the digital era – especially during the COVID-19 pandemic when people avoided touching cash. As a result, digital payments have become widespread. The government, private sector, and fintech companies, as well as the co-operation and competition between fintech companies and banks, have also helped drive continuous improvement in digital payments. This has led to a significant increase in the use of digital payments in Thailand, as well as a rapid trend toward a cashless society.

Thai government projects to promote digital payments

The Thai government has initiated various projects to promote digital payments and support the transition to going cash-free. For example, the Taste, Shop, Use (Chim Shop Chai) Project allows people to receive cash handouts when paying with the Paotang application at participating businesses nationwide. The project aims to stimulate the domestic economy and support digital spending, all while promoting public awareness of and familiarity with digital payments.

PromptPay – launched by the government in collaboration with the Bank of Thailand and the Thai Bankers’ Association – is another landmark project. PromptPay allows customers to transfer and receive money using a phone number or a national identification number. This ensures fast and secure money transfers with no fee if the amount is under a certain threshold.

Digital payment solutions offered by the private sector and fintech companies

The private sector and fintech companies are competing to develop payment applications and platforms that are easy to use, secure, and compatible with the lifestyles of today’s shoppers.

For example, Stripe Payments is a popular global online payment system that supports online payment at points of sale worldwide and meets the highest security standards. Other applications combine financial services and promotions with special offers and discounts. This has made digital wallets a fairly standard payment method in Thailand.

By making digital payments easier and more convenient, fintech technologies are also promoting access to financial services for customers who don’t have bank accounts or who live in remote areas. Private sector collaboration and competition between banks and fintech companies are also driving ongoing improvement in digital payments. For example, investments in cybersecurity and encryption aim to build trust among customers and can result in an increase in digital payments.

Summary of payment methods in Thailand

With the growth of the digital economy, payments in Thailand have become more secure and modern. Digital payments speed up transactions, reduce the burden of managing and carrying cash, and promote customer satisfaction, especially as customers prioritise payment convenience and security. This is especially true for modern shoppers, who are very comfortable with smartphones.

Compared to traditional payment methods, digital payment methods offer both customers and business owners advantages, such as reducing costs and expanding markets. Moreover, the government, private sector, and fintech companies have an impact on the ongoing and sustainable growth of digital payments.

However, traditional payments – such as cash or offline credit and debit cards – still play a significant role in retail transactions and general spending, especially among the elderly or those with limited access to technology. Today, digital payments account for around 40%–50% of financial transactions in Thailand. This trend is expected to continue, with changing customer behaviour since COVID-19 and the growth of e-commerce businesses developing alongside digital payment platforms.