By Thanit Apipatana
In urban cities and rural areas alike, a quiet change is underway—one that is transforming the way people in Thailand access financial services. The numbers tell the story: As of September 2023, the Bank of Thailand reported that the country had over 104 million mobile banking users. [KL1] These users made around 2.6 million transactions every month, primarily involving fund transfers and payments.
This extensive digital connectivity underscores the pivotal role of technology in shaping communication and connectivity in the country. In early 2024, Thailand had nearly 97.81 million active mobile connections, with approximately 63.21 million people using the internet, accounting for about 88% of the population.
In 2020, Thailand had about 53.57 million smartphone users, and this number is expected to reach almost 60 million by 2026, according to Statista data. By 2029, it’s anticipated that 97% of the population will own smartphones. With the widespread adoption of smartphones and the internet, financial institutions have seized the opportunity to offer innovative digital solutions tailored to the needs of the Thai population. The mobile banking apps are a major factor in this change. From checking balances, transferring money to paying bills, and even applying for loans with just a few taps, these apps are making banking easier and more efficient.
But the impact of digitalisation goes beyond mere convenience—it’s also levelling the playing field for underserved communities. In remote rural areas where physical bank branches are scarce, mobile banking apps are bridging the gap, providing essential financial services to farmers, small business owners, and individuals who were previously excluded from the formal banking system.
Democratising Financial Access
Behind this digital transformation are innovative fintech companies, which have been quick to seize the opportunity to serve Thailand’s burgeoning market. These startups leverage cutting-edge technology, such as artificial intelligence, machine learning and blockchain, to create inclusive financial solutions. From microloans for small businesses to investment platforms for first-time investors, fintech is democratising access to financial services like never before. As defined by the World Bank, financial inclusion refers to the accessibility of beneficial and reasonably priced financial products and services that fulfill the requirements of individuals and businesses.
Digital payment platforms have gained widespread adoption across Thailand. From street food vendors to large retailers, businesses of all sizes are adopting cashless transactions. The total transaction value in Thailand’s digital payments market is expected to hit US$39.28 billion in 2024. The largest segment within this market is digital commerce, with a projected total transaction value of US$36.64 billion for the same period, according to Statista data.
This shift not only streamlines commerce but also brings previously underserved populations into the formal financial system. For example, even those without a bank account can now receive payments digitally, opening up new economic opportunities. For instance, consider PromptPay, Thailand’s real-time payments service, which enables citizens to make and receive payments using their phone number, citizen ID, or a QR code. Additionally, the government leverages PromptPay to distribute social welfare payments directly to individuals. In 2022, Thailand topped the charts in e-wallet adoption rates by country, boasting an impressive 92% adoption rate among consumers[KL2] .
The rise of mobile banking, digital payments, and peer-to-peer lending through apps and online platforms has completely changed how individuals and small businesses get loans. In 2023, the amount of money lent digitally in Thailand hit about US$12 billion, skyrocketing by 65% compared to the year before. And it’s not stopping there – experts predict it will reach US$21 billion, showing a 31% jump by 2025.
Regulatory Action for Inclusion
Behind the scenes, the government has been a driving force in promoting digital financial inclusion initiatives. Through strategic partnerships with private sector entities and regulatory reforms, policymakers have created an enabling environment for innovation to thrive.
Over the past few years, Thai regulators have focused on developing seamless digital payment systems, laying the groundwork for emerging fintech concepts like digital banking. These innovations simplify saving and borrowing money, tailored to individual preferences. Additionally, regulations have been crafted to support new fintech innovations. Recognising the importance of financial literacy, collaborative efforts between government and businesses have been initiated to enhance public understanding of finances.
However, with the introduction of new technologies comes inherent risks. Hence, the Bank of Thailand (BOT) has implemented a regulatory sandbox programme. [KL3] This programme enables controlled testing of emerging technologies such as QR codes, biometrics, blockchain, and AI, ensuring proper risk management measures are in place.
Last year, the BOT also implemented new measures to combat financial fraud comprehensively. These include banning the sending of links in SMS or email and prohibiting requests for personal information via social media. Additionally, all financial institutions must now have a dedicated 24/7 hotline for fraud victims to report losses and receive prompt assistance, among other initiatives.
However, challenges remain on the path to full financial inclusion. While internet penetration rates are high in urban areas, rural communities still face connectivity issues, hindering access to online financial services. Additionally, ensuring the security and privacy of digital financial transactions is paramount to building trust among users. Regulatory frameworks must evolve to keep pace with technological advancements while safeguarding consumers’ rights.
Nonetheless, the trajectory is clear: digitalisation is revolutionising financial inclusion in Thailand. As smartphones become ubiquitous and digital literacy grows, the barriers keeping millions from formal banking services are fast disappearing. Today, access to such services is no longer a luxury but a fundamental right.
Who is Thanit Apipatana:
Thanit Apipatana is a Bangkok-based entrepreneur, investor, and startup advisor with a keen interest in venture building, real estate, F&B, sports and philanthropy. Mr. Apipatana has advised and invested in companies in the region, including Singapore-based proptech startup Mogul.sg and Thai-based Life Below Labs. As a thought leader, Mr. Apipatana shares his insights on entrepreneurship, F&B, education, sports and the social sector.