Fees for recently launched cross-border fund transfers between Thailand and Singapore through the PromptPay and PayNow systems may be lowered in the future if the transaction volumes are high, says the Bank of Thailand (BoT).
There have been around 3,000 transactions using the cross-border remittance service between the two systems since the BoT and Monetary Authority of Singapore (MAS) implemented the financial linkage on April 29, said the central bank's assistant governor, payment systems policy and financial technology group Siritida Panomwon Na Ayudhya.
The fee for this real-time cross-border remittance service is set at 150 baht per transaction, far below the general market rates of around 300-1,000 baht per transaction depending on the conditions of each service provider.
Four Thai commercial banks offer a retail cross-border fund transfer service: Bangkok Bank, Kasikornbank, Krungthai Bank and Siam Commercial Bank. In a promotional campaign, the four banks are offering a special fee of 75 baht per transaction until the end of July this year.
Ms Siritida said the BoT has been monitoring users' demand for the PromptPay and PayNow cross-border remittance service. It has shown a positive sign over the past six days since the service was first offered, and the transaction numbers would continue to increase.
"If transactions reach a reasonable scale, the fee charged could be lowered," said Ms Siritida.
She said the central bank plans to follow the service demand until the end of this year, and it would consider the rate charge again. If transactions increase faster than expected, it could review the fee in the third quarter of the year.
The PromptPay and PayNow linkage is part of the Asean Connectivity project under collaboration of regional central banks. The BoT has been in talks with the central banks of Malaysia, Indonesia, and Vietnam to connect PromptPay with the infrastructure payment systems of the three countries.
Given the complicated nature of the rapid payment system that the financial linkage provides, it would require more time in terms of developing service connectivity. The BoT and MAS spent around two years to achieve the financial linkage, according to Ms Siritida.
Thai commercial banks also launched cross-border QR payment connectivity with Japan, Laos, Cambodia and Vietnam. Central banks aim to expand the digital payment system across the region in the future.
The BoT said there had been total PromptPay registrations of 56.7 million as of Feb 28 this year, of which 34.3 million registered via ID card and 21.4 million by mobile phone number. On average, there are 22.3 million PromptPay transactions per day. Peak transactions are at 27.1 million per day.