Credit card transactions need regulation

As a former banker who is quite familiar with the Thai credit and debit card industry, I suspect that the “debit card machine” (otherwise known as an EDC) the writer was referring to did not actually break down. The merchant simply did not want to pay a merchant fee, ranging from 1-3 per cent (no limits), to the bank. While some merchants are reluctant to accept debit cards, others choose to pass on this cost to their customers instead.

This situation is not unique to Thailand. In the US, it was so bad that the Federal Reserve Board had to step in to set limits on debit-card swipe fees last June. The new rules has capped at 24 cents (about Bt7) the fee that merchants pay banks each time a customer buys something with a debit card.

Unless Bank of Thailand imposes a similar rule, Thai debit cardholders, as well as foreign customers using their debit cards in Thailand, will continue to be subject to the said “unlimited” fee. This is despite the fact that the cost of swiping the card is fixed regardless of the transaction amount. In other words, a Bt100 transaction and a Bt100,000 transaction cost the bank exactly the same in leased-line connection, thermal paper, printing, etc.

Ex-banker

Bangkok