It had been thought that with high smartphone penetration among the population and the widespread use of digital apps for payments during the pandemic, a transition to a cashless society had begun. The answer, according to a survey of 6,020 people, is unequivocal. No, it has not. 65% of users who took up Krung Thai Bank’s Pao Tang app to avail of government financial supports have opted to no longer use it while cash is seen to have an edge under every criterion. It is seen as more convenient, more widely accepted, cheaper and more private.

A groundbreaking survey carried out by the Bank of Thailand into the payment and purchasing habits of the Thai public shows a marked reluctance to switch over from cash to a digital payment system. The study showed that at least 50% of people will continue to use only cash for day to day payments while nearly all respondents said they felt cash was a necessity for daily life. The survey also highlighted the fact that cash payments were cheaper with a 5 to 10% saving.

A study conducted by the Bank of Thailand has shown that at least 50% of the Thai public will continue to use cash as their preferred payment method even after widespread takeup of banking apps such as Krungthai Bank’s Pao Tang app during the pandemic to receive government payments, support and subsidies. The study revealed that cash is seen as, by far, a better choice for a majority of customers as opposed to banking apps and even credit cards because it is easier to use, more accepted and more economical while offering better privacy.

The result of the ongoing survey and study has raised eyebrows among the boffins at the Bank of Thailand which shows that nearly all Thai people continue to use cash for daily purchases and essentials.

The survey was conducted to study the impact of the government’s efforts to create a digital and cashless society as a part of the response to the pandemic crisis since 2020. 

Unprecedented government programme of direct financial supports channelled through bank apps

This saw unprecedented government direct support programmes to encourage people in the kingdom to use banking and payment apps through their smartphones, in particular the Krungthai Bank Pao Tang app.

However, planners and officials have been somewhat taken aback by the conclusions reached by the study which showed that, contrary to conventional wisdom, people in Thailand are still intent on using cash because they consider it more convenient and economical than digital payment methods.

It had been thought that the availability of mobile devices and familiarity with mobile applications were the main hurdles preventing people from opting to support a cashless, digital society but the results of this detailed study suggest quite the contrary.

Survey with 6,020 respondents from all age and socio-economic groups across seven regions saw only 27% of people opt to continue with the banking app

The survey and study carried out by the Bank of Thailand involved no less than 6,020 interviews with the public across all age groups and socio-economic backgrounds with accurate samples across seven regions of the country.

In particular, the study focused on the popular Pao Tang banking and payments app distributed by the Krungthai Bank which was used by the government to make payments and provide direct purchasing supports to the Thai public during the pandemic.

The survey found that only 35% of users would make use of a mobile banking payment app at all in the future as the scheme is wound down and only 27% would continue to use the Krungthai Bank Pao Tang app. 

65% of people interviewed said that they would no longer use the banking application with a full 50% saying that they will only use cash for day to day purchases and transactions going forward.

92% of adults in the kingdom have smartphones and use them on average for 6 hours and 8 minutes a day

This is even though 92% of all adults in Thailand now regularly use smartphone devices with a 2020 survey showing the average time spent online per day is 6 hours and 8 minutes while a staggering 99.9% of active and high spending 15 to 24-year-olds have smartphones.

Thailand is the world’s No 1 for use of social media and mobile payments to power new economy moving online

The study concluded that Thai people prefer to use cash to make purchases at street food stalls, flea markets and grocery stores or what has been referred to as the ‘grassroots’ Thai economy that was hit so hard by the recent pandemic.

The study noted that virtually all those who took part in interviews saw it as a necessity to have cash in their pocket and saw it as more convenient than digital payments.

Need for new digital payment methods to be more ubiquitous among ‘grassroots’ vendors or outlets

It concluded that to move the kingdom to a cashless society, it would be necessary to encourage smaller traders and enterprises to install payment systems and make them available to customers.

The problem is there is no inherent demand or economic advantage to this.

Significantly, a key finding also suggested that consumers are very much aware that there is an effective 5% to 10% saving to be had by using cash due to the ability to negotiate with sellers or the charges associated with a digital payment both to the seller and the buyer.

Cash, according to the study, was seen as more private, more widely accepted, more convenient and offering better value.

The study, one of the most significant ever to be undertaken on Thai spending and payment habits, presents itself as a hard dose of common sense to what, for decades, has been accepted as conventional wisdom and pours cold water on breathtaking claims that Thailand is moving rapidly to a digital society.

It also raises questions about the need for such a move.

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