Thai cash usage plummets as Sweden turns around and seeks cash protection. Thailand embraces digital payments as cash transactions drop to 66%, signalling a shift in consumer behaviour. Meanwhile, Sweden’s central bank pushes for cash protection, highlighting global concerns over a cashless future.

A new report shows Thai consumers drifting increasingly towards digital payments. The Bank of Thailand report studying payments throughout 2023 shows that cash transactions had fallen to 66%. Previously, Thai consumers were seen as strongly wedded to cash. This news has just been released and warmly welcomed by the central bank. However, it comes as Sweden’s central bank, where only 2% of payments are now in cash, is moving in the opposite direction. In November 2023, the Nordic country called for the right to use cash for payments as legal tender, to be enshrined and protected by legislation.

A new report from the Bank of Thailand shows Thai consumers in 2023 shifting from cash towards digital payments. Only 66% of payments last year were in cash. Meanwhile, Sweden, the country that pioneered a cashless society, is moving in the opposite direction. In November 2023, the Riksbank or Swedish Central Bank called for cash payments to be protected by legislation despite cash transactions falling to only 1% of GDP.

In 2022, a shocking survey for central bank chiefs showed a marked reluctance by Thai people to switch to digital payments.

That survey came just after the pandemic era when millions registered for government digital applications to receive financial benefits.

At that time, only 27% of people continued to make online or digital payments while 50% vowed never to move from cash. However, in the last two years, there has been a change.

New report by the Bank of Thailand for 2023 shows that cash payments in the economy fell to 66% as the public embraces various digital payment networks

According to a recent report released by the Bank of Thailand (BoT), indeed, there has been a significant shift. In brief, the latest survey shows spending habits of Thai people moving sharply towards digital payments.

Cash is still king in Thailand with a cashless society not on the cards anytime soon says study

Significantly, the report shows cash usage among Thai citizens shrunk to just 66% of total spending in 2023.  In truth, it marks an eye-opening decline from previous years. 

The report indicates a growing trend towards digital payment methods. Conversely, digital payments have risen from 27% to 34%.

At this time, the data shows an average of 538 digital payments per person per year. In short, it represents a substantial increase compared to five years ago.

‘The data clearly demonstrates the increasing adoption of digital payment methods among the Thai population,’ explained a spokesperson for the Bank of Thailand.

‘With 96% of total payments (non-cash transactions) being made through Internet & Mobile Banking, and accounting for 84% of the total payment value, it is evident that people are becoming more accustomed to incorporating digital payments into their daily lives.’

Sharp rise over 5 years in digital payments with 136.1 million accounts being used by Thai consumers during 2023. Average transaction value fell to ฿5k

At the end of December 2023, the number of accounts utilising digital payment methods reached 136.1 million. In effect, they came with a total transaction volume of 29.4 billion valued at ฿105.3 billion.

Certainly, one key aspect of the report is the growing popularity of the PromptPay system for money transfers. With 77.2 million users, PromptPay transactions saw an average of 54.5 million daily transfers throughout last year. In turn, the value of transactions came to ฿129.9 billion. 

The average value per transaction decreased to less than ฿5,000 at the end of 2023, reflecting a shift towards smaller-value transactions.

Furthermore, the usage of e-money or prepaid cards saw a significant increase in popularity. By the end of December 2023, there were 116.5 million e-money accounts. In short, this network saw a transaction volume of 3.0656 billion worth ฿ 713.4 billion.

Payment for goods and services emerged as the most common purpose for e-money transactions. Undoubtedly, this is due to the convenience and versatility of the payment method.

Credit and debit cards still being used extensively both for online and offline purchases in Thailand despite the multitude of new payment apps available

The report also highlighted the continued preference for electronic cards, including debit and credit cards, among Thai consumers. Online payment channels accounted for nearly 30% of the transaction volume in 2023. 

This covered expenditures in shops, travel and within restaurants. By and large, these were the most popular categories. 

However, despite the growing popularity of online payment apps, many consumers still prefer to use credit and debit cards offline. In particular when making purchases in-store.

‘As Thailand’s digital payment landscape continues to evolve, it is essential for businesses and financial institutions to adapt to changing consumer preferences,’ disclosed the Bank of Thailand spokesperson. ‘Efforts to enhance digital infrastructure and promote financial literacy will play a crucial role in facilitating the ongoing transition towards a cashless society.’

Bank of Thailand welcomes the trend saying it bodes well for the emerging fintech sector. Report confirms Thailand is moving towards a cashless society

The BoT’s report points to the transformative impact of digital payments on Thailand’s economy and consumer behaviour. In turn, it signals a promising future for the country’s fintech sector. As digital payment methods become increasingly integrated into everyday life, a key question is access for the marginalised.

From the Bank of Thailand’s upbeat report, it would appear that society is on the move eventually towards a cashless economy. However, there is increasing concern about what such a future may hold.

Currently, in Western countries, there are populist movements to retain the use of cash. The extent of the public backlash against moves to remove cash from retail markets has surprised many. Especially so in the corporate world.

However, it is gaining traction and recognition not just among activists but surprisingly, by governments who have led the move towards a cashless future.

The concerns which have emerged are significant. Firstly, a cashless society excludes the elderly or those without a grasp of digital technology.

This is coming at the same time as countries like Thailand face a changed future as rapidly greying economies.

Opposition to the whole concept of a creeping and assumed cashless society rises in Western countries. People horrified at the social experiment seen in China

Furthermore, one of the greatest fears is what the world has seen in China.

In the communist country, a dystopian system has been unleashed. This has seen digital payment technology combined with security databases. In effect, it is being used to control the population.

China’s infamous social credit system is recognised worldwide as a tyranny on its population. It comes despite its reliance on an ethos and values that have been pedalled for decades by the left in Western societies.

Even beyond this, there are more practical reasons to be concerned.

One is the increasing threat of cyber attacks and theft. 

For instance, rogue nations including China and North Korea have been linked by the Federal Bureau of Investigation (FBI) to major cybersecurity attacks on Western countries and banking systems.

Rising threat of cybercrime and identity theft has suddenly made cash safer when used with a standard bank account. It also saves money for traders

This has seen huge levels of identity theft targeting credit card holders.

Similarly, cybercrime gangs based in call centres around the world can cause bank account holders to lose significant sums. 

In addition to this, there is the simple danger of system outages which can effectively leave consumers without payment options. These outages can leave whole economies paralysed.

At the same time, a bank account exclusively used for cash withdrawals for spending has become safer than online banking.

Digital payments, while in theory supposed to be cheaper because of the absence of printed notes, mean hefty turnover charges for all businesses.

The fear is that if cash is removed, this will be exploited by banks and financial institutions.

In particular, if such institutions experience financial difficulties or a crisis.

Undoubtedly, the past has shown that this is not only a possibility but a likely outcome.

Cash gives users anonyminity and freedom. Sweden, the country in the world that has pioneered the cashless society has suddenly backtracked on the issue

Certainly, fears are rising about the danger posed to human rights. This aspect cannot be overestimated. Basically, a digital payment cannot be anonymous.

While the freedom of cash makes it an ideal vehicle for tax evasion and criminality, it also protects the privacy and the freedom of the individual.

These downsides have recently been recognised by Sweden’s central bank, the Riksbank in Stockholm.

The Nordic country has seen cash transactions fall to only 2% in recent years with only 1% of GDP now being cash-related.

Nevertheless, the Riksbank in November 2023, in a detailed submission to Sweden’s Ministry of Finance, called for a strengthening of the position of cash in government legislation.

Riksbank calls for cash payments to be protected and enshrined in legislation in recent move with only 1% of Sweden’s GDP presently being generated by it

In short, the Swedish central bank wants the ability of consumers to use cash in payments to be enshrined in law. Basically, to see it acknowledged as a fundamental human right.

The proposal was contained in a document titled ‘The State and Payments’. The submission came after an inquiry into the matter was finalised.

It asserted that the state ‘should have a more active role in the payment system and that several of the inquiry’s proposals need to be tightened and clarified.’

After that, the northern kingdom’s central bank boss, at a press briefing, made the bank’s position clear.

‘Firstly, the position of cash needs to be strengthened so that consumers can use cash for payments,’ declared Riksbank Governor Erik Thedéen. ‘Secondly, more consumers and businesses need access to payment accounts. Everyone who needs to pay must also be able to pay.’

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