In Thailand, many locals use their smartphones when shopping and pay by QR code.
(Photo: Bloomberg)
Bombay If you are a foreign tourist on holiday in Thailand and want to explore the capital Bangkok by elevated train, you have to queue at the ticket counter. While locals skip the line by paying for their ticket in seconds by scanning a QR code, tourists have to pay in person at the counter with their 500 and 1000 baht notes.
Behind the fast mobile phone transfer is a standardized, national payment infrastructure called Prompt Pay, which is based on cooperation between the state and the private sector.
The payment structure is open to any bank or fintech app that wants to use it. The system works regardless of which bank customers and retailers have their accounts with, which payment apps they use or – in contrast to offers like Apple Pay – which smartphone they use.
Fees do not apply. This makes the digital payment option attractive even for transactions of smaller sums. However, you need a local bank account, tourists are still left out.
When it comes to real-time payment services via smartphone, Thailand, where you can now pay for any noodle soup on the side of the road with your cell phone, is one of the world market leaders behind India and China .
It is sufficient to show the customer a printed QR code to scan with a smartphone – the money is then in the recipient’s account in no time at all, even without expensive technology.
India reports 72 billion transactions a year
The ease of use has given Asia’s new payment models a unique triumph. In India, the global pioneer in smartphone transfers, 72 billion transactions were registered via the national real-time payment system Unified Payments Interface (UPI) last year – double the number of the previous year. Even in rural areas there is hardly a retailer who does not accept this payment method. The system also works to easily send money to friends and relatives.
According to a study by the financial service provider ACI Worldwide, which refers to figures from 2021, real-time transactions are nowhere as successful as in India: the transaction volume there was almost 50 billion dollars, more than twice as high as in China in turn Thailand is clearly dependent. Brazil and South Korea are listed in fourth and fifth place. The volumes are now significantly larger.
In the weekly column we take turns writing about innovation and economic trends in Asia.
(Photo: Klawe Rzeczy)
India alone has more digital transactions than the USA, Great Britain, Germany and France combined, India’s IT Minister Ashwini Vaishnaw emphasized a few weeks ago at the World Economic Forum in Davos. Prime Minister Narendra Modi announced a few months earlier that India now accounts for 40 percent of global real-time transactions.
Singapore and India connect payment systems
India plays a central role when it comes to setting international standards for digital payments. The country’s authorities are busy exporting the UPI in the region – from Nepal to Bhutan to Oman, they have already signed agreements that allow Indians abroad to pay with similar ease using smartphones and QR codes when traveling like at home. On Tuesday, the Indian central bank announced that it would dock the real-time payment infrastructure to Singapore.
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Thailand has also linked its Prompt Pay payment system to Singapore’s Pay Now variant with an interface. Indonesia, Malaysia and the Philippines have also announced that they want to dock their digital payment systems with their neighbours’ platforms. For Asian holidaymakers, this should make traveling on the continent much easier in the future – organizing cash in foreign currencies could soon be a thing of the past.
This should also make the financial industry in Europe sit up and take notice: In view of the hundreds of millions of users in Asia, the new payment standards could quickly become serious competition for the Belgian-based system Swift, which has so far dominated payment transactions.
The fact that German institutions have so far only been observing developments from the outside instead of helping to shape them threatens to become a long-term disadvantage for the German economy in international business. Until that changes, German tourists to Asia will probably remain dependent on cash from ATMs and exchange offices.
In the Asia Techonomics column, Nicole Bastian, Dana Heide, Sabine Gusbeth, Martin Kölling and Mathias Peer take turns writing weekly about the most exciting technological and economic trends in the world’s most dynamic region.
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