As digital payments increase, the Bank of Thailand is focusing on cash users by adjusting banks' fee structures.
The adjustment is part of central bank efforts to promote digital payments and move towards a less cash-reliant society. The regulator is paying greater attention to some consumer segments that do not use digital payments.
According to Bank of Thailand governor Sethaput Suthiwartnarueput, the central bank is in discussions with banks regarding the adjustment of fee structures, covering fees charged by banks to customers and fees charged among banks.
Some banks charge their peers for payment system access, but this eventually impacts consumers.
In light of this, the regulator believes it is essential to consider a readjustment of the overall fee structure, said Mr Sethaput.
Wipawin Promboon, senior director for the financial institutions strategy department at the Bank of Thailand, said the central bank intends to enforce a new fee structure equally for all banks.
The regulator is open to pricing competition, in accordance with market mechanisms, she said.
"The central bank plans to discuss with banks fees for cash transactions, with the aim of finding a balance on the issue," Ms Wipawin said.
Some banks recently disclosed plans to charge for cardless ATM withdrawals, but the plans were postponed because of strong opposition from consumers.
The country's adoption of digital banking is growing in line with the digital era, but fee-based income for the banking sector has been declining and banks face high costs for cash services.
Based on data from the Stock Exchange of Thailand, the combined net fee and service income of the 10 SET-listed banks (excluding SCB X and CIMB Thai Bank) for the first quarter of 2023 amounted to 30 billion baht, a decrease of 0.18% quarter-on-quarter and 1.68% year-on-year.
Meanwhile, SCB X, the holding company of Siam Commercial Bank (SCB), the fourth-largest bank in the industry, reported fee income and other revenue of 10.8 billion baht in the first quarter this year, a 3.3% increase quarter-on-quarter, but a 6.6% decrease year-on-year.
SCB chief executive Kris Chantanotoke said banks have been discussing a new fee structure, seeking to strike a balance between services and fees amid the transition to digital and a cashless society.
"If banks charge additional fees for certain services, it should be based on improved service, convenience and reasonable pricing, which customers can accept," he said.
While cash transactions, including ATM usage, have been declining, banks still incur high expenses for cash management and security systems.
Cash and ATM transactions are still necessary for some customer segments. Mr Kris said SCB is exploring ways to minimise the cost of ATMs by sharing costs and income with other banks.
SCB is also focused on expanding its digital banking services and generating more fee-based income from its digital platform, he said.
With 17 million total customers, 14 million of whom are digital banking users, SCB plans to boost fee-based income from wealth management and bancassurance, which have high potential for growth, Mr Kris said.
