KTB eyes new fees to boost debit card use
Krung Thai Bank is calling for anyone who withdraws more than Bt100,000 per time to be charged a fee so that banks can generate funds to provide more electronic data capture (ECB) machines to merchant customers nationwide.
“If the country uses this model, we believe payments in Thailand will shift from cash to debit cards. Then merchants and cardholders won’t have to pay fees when the local switching system is implemented,” Anuchit Anuchitanukul, senior executive vice president of KTB, said yesterday.
Thailand has only 280,000 card-readers for more than 1.6 million merchants. EDC terminals should be expanded to cover at least 1 million merchants if authorities want to promote debit cards and a local switching system, he said.
To encourage people to use debit cards instead of cash, authorities should allow banks to collect a fee from customers who withdraw Bt100,000 or more in banknotes at bank counters.
Only 1 per cent of customers nationwide withdraw Bt100,000 of cash per time. If banks can charge them a fee, they will have money to invest in EDC machines to lend to merchants that require the machines to service their customers. And customers using bank branches would switch to using a debit card instead.
KTB has prepared its system to link with the local switching system and expects the country can use local switching this year.
The bank’s debit-card strategy is to target lifestyles and segments by joining with partners to offer privileges to cardholders.
“We found that the spending on active KTB debit cards that join with partners and give more privileges, the so-called smart debit cards, is higher than on existing debit cards,” he said.
The bank is explaining the advantages and benefits of debit cards to existing customers to persuade them to replace cash with new smart debit cards.
Of the 11.5 million KTB debit cards in circulation, about 5 million are old cards and the rest are smart debit cards. A cardholder will be required to change to a new smart card after using an old card for five years.
Spending on KTB’s active debit cards is 4 per cent compared with 3 per cent in the industry.
Card spending is expected gradually to increase when existing customers use new smart debit cards.
KTB targets this year the issue of 500,000 to 1 million new debit cards.
