Joint push for chip-embedded debit card urged
The Bank of Thailand has called on the commercial banks to cooperate with it to promote electronic data capture (EDC) for card-based payments and offer incentives to small and medium-sized merchants to ensure wider use of chip-embedded debit cards.
Next year, all ATM and debit cards issued by Thai financial institutions will use embedded microchips instead of magnetic strips, to comply with the policy of the BOT’s Payment Systems Committee.
To ensure a high standard for the new system, the Thai Bankers’ Association is cooperating with China’s UnionPay International to establish the Thai Standard Format. The TBA yesterday signed an agreement with UPI.
Tongurai Limpiti, BOT deputy governor for financial institutions stability, said at the signing ceremony that the chip system would help prevent the skimming of ATM and debit cards, and the chips in the cards would facilitate the move towards wider e-payment in the future.
At present, there are 50 million debit cards in Thailand. After the country adopts the card-chip technology, more merchants should begin utilising EDC technology for payments, she said. Commercial banks that issue the cards should also think about how to promote EDC to small and medium-sized merchants.
"The banks should … offer incentives to the merchants. Using cards instead of cash will help reduce the risk of skimming and reduce the cost of banknote issuance as well," Tongurai said.
She said the key factors to ensure the acceptance of debit cards were security, communication and infrastructure development.
"Security is essential for using debit cards for making transactions. Payments in the future will be seen on other platforms such as smartphones, tablets and even watches, and the advances of technology will bring not only opportunities but also new risks. Therefore, the banks have to prepare [ensure] the security of the chip debit cards."
Kobsak Duangdee, secretary-general of the TBA, said Thai Standard Format would be applied to the chips embedded in ATM and debit cards, and Thailand having its own standard would support the widening acceptance of debit cards in the future.
Ge Huayong, chairman of UPI and China UnionPay, said the cooperation with TBA would enhance the standard of Thailand’s e-payment industry.
