Q & A
Q & A
Online Payments in
Thailand is 3rd largest country in Southeast Asia with a population of 67 million. It stands out within region for having large and rising middle and upper-middle income classes: ten years ago, 28% of households in Thailand earned more than US$10,000 in real terms and
now almost 40% do
. Thailand is a promising market for online shopping, and a lucrative one for online and mobile games.
Only 5.5% of adult Thai citizens
reported having a credit card in 2014
, up just slightly from 4.5% in 2011. As with many other developing countries, Thai customers report a lack of trust in using their credit cards for online transactions and prefer using cash and/or bank transfers for such purchases. Moreover, many of the Visa/MasterCard cards that banks issue customers are effectively ATM cards that can be used domestically, but
often will not be accepted online by foreign merchants.
While credit card penetration is very low, 78% of Thai adults have a bank account with a formal financial institution, the largest of which are Bangkok Bank, Siam Commercial Bank, Krung Thai Bank and Kasikornbank. Customers in Thailand perform bank transfers in one of two ways: (1) at an ATM, or (2) using an Internet banking service. Both methods are considered to be a quick and common way of making payment for everything from flight tickets to online game credits.
Merchants can use Codapay to accept payments from any bank in Thailand via online banking, ATM transfer, or payment at a bank branch;
to learn more.
Cash Payments at Retail
Neilsen Global Saving and Investment Strategy
reports indicate that 68% of the Thai population use cash as the preferred method of payment.
For more than 7 years, retailers including Tesco-Lotus, Family Mart, Big C and 7-Eleven (via the popular "Counter Service" payment brand) have enabled customers to pay bills and complete transactions initiated online over-the-counter using cash. This method of payment is popular and well understood with customers, and is inexpensive for merchants. A number of other companies have even introduced over-the-counter payment services that don't leverage their own physical distribution networks, but instead enable a partner to provide the service using just a smartphone application. Examples of these types of services include True Money Express (by True) and Airpay (by Garena).
Merchants can use Codapay to accept payments from Tesco Lotus, Family Mart, Big C, M-pay, and True Money Express;
to learn more.
Direct Carrier Billing (i.e. SMS billing, Telco payments, pulsa)
Direct carrier billing is an increasingly attractive payment channel in Thailand: in 2014 changes came into effect that removed the obligation for Telcos to share 20-30% of their revenue with state-owned enterprises. This change in tax policy means has made direct carrier billing a more cost-effective way for merchants to collect payment for digital content. (It's still more expensive than other channels that Telcos in Thailand provide, like game vouchers, but the level of convenience of direct carrier billing is unparalleled).
The biggest mobile operators in Thailand are AIS (with 45 million customers), DTAC (with 28 million customers), and truemove (with 24 million customers). CAT Telecom and TOT (Telecom of Thailand) also operate in Thailand but have a relatively small (<1m) subscriber base. Smartphone penetration was 37.7% as of December 2014, and it is expected to hit 50% by the end of 2015.
Direct carrier billing is Coda's flagship payment service.
to learn more.
Thai Telcos lead the world when it comes to providing voucher codes that can be used as a method of payment. True, AIS, and DTAC each offer their own 'cash card' – known as the
True Money Cash Card
AIS 1-2-Call Card
, and the
DTAC Happy Cash Card
– and this channel is a very popular method of making payment for digital content. All three services work basically in the same way: the customer either (1) buys a physical card which contains a code that can be revealed by scratching the back, or (2) goes to a convenience store and asks the cashier to print them a code from the terminal in their store. The customer then enters that code into the merchant's website, the value associated with that card is redeemed, and the purchase is complete.
Unlike Indonesia and the Philippines where prepaid mobile credit is distributed by Telcos electronically and without the use of a voucher code, in Thailand the True Money cash Card, AIS 1-2-Call Card, and DTAC Happy Cash Card are primary channels through which Telcos distributes their prepaid credit. As a result, these codes are widely accessible. And because any customer with a mobile phone knows what to do with the voucher code (they purchase and redeem a code any time they top-up their prepaid balance), it's an intuitively understood payment experience.
Merchants that use Codapay can receive payments via the True Money Cash Card.
to learn more.
Over the years, dozens of e-wallets have been introduced in Thailand, but there has yet to be a breakthrough success story like PayPal in the US, Alipay in China, or Paytm in India. Instead, there is now a long list of services that are in market, each with fewer than one million active users, including e-wallets issued by:
(i.e. M-pay by AIS, True Money by True)
(i.e. MOL, Paysbuy)
E-wallets come in two flavours. Those issued by Telcos and banks (along with Paysbuy) are governed by the e-money rules stipulated by Bank of Thailand, and as such can be used for the purchase of physical goods. E-wallets issued by companies like MOL on the other hand can only be used for the purchase of digital content.
In part because the user experience is not seamless (customers must register for an account and add credit to that account before they can transact, while transacting itself requires a redirect away from the merchant site and login), e-wallets have yet to catch on with customers in Thailand.
If you need help navigating Thailand's landscape of payment channels, or are interested in learning more about how Coda can help you monetize in this market,
get in touch!
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