Insights 10 October 2019

Bio Payment : A new take on payments in a cashless society

“You can make payments without cash.”, Thailand is gradually turning itself into a functioning cashless society – meaning that after five years, you will not need cash for your financial services. Moreover, a new technology is called “Biometric Payment”, or simply “Bio-payment” that allow you use your personal physical information/identification to authorise any form of monetary transaction. You will not need even cards or applications to make payments anymore.


In the recent years, new electronic payment methods have been introduced to Thai society especially ‘PromptPay’. It is a National e-Payment scheme that allows people to attach their bank details to their ID cards or phone numbers for instantaneous interchange of money with zero transaction fees when compared to commercial banks. In the private sector, commercial banks have started allowing people to use pay their bills electronically with the help of QR codes and such other tools.  


Thais have started introducing electronic payment methods into their everyday lives; owing to various incentives presented by the government sector such as ‘PromptPay’. It is a National e-Payment scheme that allows people to attach their bank details to their ID cards or phone numbers for instantaneous interchange of money with zero transaction fees when compared to commercial banks. In the private sector, commercial banks have started allowing people to use pay their bills electronically with the help of QR codes and such other tools.  


According to the Bank of Thailand, the general landscape of commercial transactions in the recent few years has made a noticeable change towards the realm of electronic or Digital Payments. In the stretch of time between 2016 and 2018, the rate at which people conducted their transactions through mobile phones – whether they be for payments or simply money transfers, saw an average growth of 116% percent per year. This noticeable change was under the National e-payment Master plan devised by the Bank of Thailand, who put the PromptPay system in place and broadened the scope of usage for all types of payment cards. 



Cashless Payments


Statistics show that there has been an increase in the usage of e-Payments from 49 transactions/person/year in 2016 to 63 transactions/person/year in 2017, and up to 89 transactions/person/year in 2018 subsequently. Most of these Digital Payments were cash transactions, and this mode of Digital Payment service has shown steady growth of up to 83 percent. It is reported that there were as many as 3.205 million transactions made in 2016, which increased to 4.171 million in 2017, and shot up to 5.868 million transactions by the end of 2018, with Mobile Internet Banking showing an increase of 263 percent within the last 3 years. 


These numbers go to show that Thailand is heading towards a cashless society; one which will take its full form in 5 years. One of the most crucial benefits is that you will not need to use a card or a mobile application to complete your transactions anymore. This new method of payment that is making its presence known is called the “Biometric Payment” system (or “Bio-Payment” in short) which involves using a person’s physical features/characteristics to approve a financial transaction – such as their facial feature, finger prints, voice, retina, or blood sample etc. 


With the Bio-Payment method, a user will not have to remember their passwords, or carry physical devices such as mobile phones or tablets in order to carry out their financial transactions anymore. This will allow you to make your necessary payments with ease and simplicity in no time – thus proving itself to be more efficient and effective than any form of money interchange service you have ever used in the past. Nevertheless, it must also be understood that the user experience received might differ from one situation to another. For example: While fingerprint scanning is a well-known process for transaction approvals, it is also proven to have a 15 percent failure rate amongst users; leaving a portion of people with a lack of enthusiasm for this authorization method.


In order to make a comprehensive transition into a cashless society with the use of Bio-Payment, we will also need to address a few safety concerns that may arise. This can be a crucial matter because a person’s personal features may not always be a secret, and there can always be attempts to emulate their identifying characteristics in order to falsify transactions or to commit larceny at the expense of a user’s assets. Therefore, verifying a person’s true identity with the help of their identifying features should be done with the utmost care, and the retrieval and processing of a person’s biometric data from a database for a Bio-Payment transaction must also be done with measures taken to prevent technological and informational security mishap.


Information exchanged in a particular Bio-Payment transaction might not be a secret, but it is the type of information that depicts the physical characteristics of a person and therefore it must also be legally protected with adherence to laws regarding personal information. The European Union in 2012 has suggested that all Biometric information should be considered highly sensitive and treated with more caution than most forms of personal information.  


Therefore, for businesses to make the most resourceful and effective adaptation of this technology, they must form alliances with or invest in creating an organisation that deals directly with the process of Biometric Authentication to create a payment service that is ingenious and safety-ensured so as to be the leader in the field of Bio-payments – the form of service that will draw more and more customers into the banks. They will have to create and strengthen Consumer Biometric Authentication processes, organise an internal training program, and join hands with their alliances so as to move the bank forward in the new Digital Business Ecosystem. Along with that, they will need to develop and invest in the various departments that deal with Documentation and legalities, and Research and Development, so as to prime all units in the bank for any necessary changes that need to be made at a given time. 


Additional industry sectors, especially retailing, should also consider investing into Bio-Payment systems, so that when it has become fully immersed into the commercial segments of the market, they will be able to design a payment process that is fully aligned with the spending behavior of the consumers. Once they have a created such a seamless payment system of their own, they can enjoy business growth in the form of differentiation that offers an effective and novel experience for the users, reduced speed in transactions and payments, and an opportunity to curb their labor costs. 

stay in innovative business trends with us