Bangkok Bank and Kasikornbank formed an EDC machine alliance and will offer lower fees for card payments. The fee amount will be 0.75% of the amount charged. The two banks currently charge a rate of 1.5% – 2% per transaction, which is on par with what other banks offer.
Shops have the option to share fees with customers. Most banks currently pass all of the merchant fees on to customers, which makes goods more expensive.
The move by the two banks is an effort to fight against the e-payment scheme, which the government initiated to promote electronic transactions. The scheme also undercuts bank fees, which has the potential to negatively impact bank revenues.
Merchant fee cuts are expected to move Thailand to a cashless society, rather than a cash-based society.
The first phase of the e-payment scheme will result in 500,000 EDC machines installed starting next month. There are 300,000 EDC machines controlled by banks that have already been installed prior to the scheme going into law.
Auctions will be implemented which will allow banks to own licenses for the machines. No information on how the auction will pan out has been provided. The banks assume that there will be two licenses up for auction for EDC machine installations.
EDC machines will be installed nationwide and in all government offices, too.
The e-payment scheme resulted in 19 financial institutions, entering into a memorandum of understanding to offer PromptPay last week. The service will allow money transfers through the Internet and mobile banking. Registration for PromptPay will open up nationwide on July 15.