Thailand and Hong Kong Launch Cross-Border QR Payments
On December 4, 2023, Thailand’s central bank and the Hong Kong Monetary Authority launched a new cross-border QR payment link enabling travelers from Thailand and Hong Kong to make retail payments through their mobile payment applications.
Further, Hong Kong travelers can make a maximum payment of HK$10,000 (US$1,279) per day while Thai travelers can spend a maximum of of 500,000 baht (US$14,149) daily.
QR payments can help boost tourism numbers in Thailand
For Thailand, this seamless payment transaction system will help boost their efforts to attract more travelers from Hong Kong and mainland China.
The Thai government also introduced a visa waiver program for Chinese tourists between September 25 and February 29, 2024. Through this five-month stimulus scheme, tourists can stay up to 30 days with the government aiming to attract some five million Chinese tourists by the end of the year. Without the visa exemption scheme, the government expected to see 3.4 million Chinese visitors for the year, or 31 percent of the total in 2019.
Tourism has been a key driver of Thailand’s economic recovery in 2023 although the numbers are still below pre-covid levels. The country received an estimated 24.5 million foreign tourists in the first 11 months of this year which is in line with the government’s target of 25 million visitors – In comparison Thailand saw 40 million international arrivals in 2019, accounting for 18-20 percent of GDP.
QR payments can strengthen Thailand’s MSMEs
QR codes can encourage Thailand’s micro, small, and medium-sized enterprises (MSMEs) to adopt cashless payment options, particularly since most MSMEs are in the informal sector and are either unbanked or underbanked. An estimated half of Thailand’s population remains unbanked or has no access to financial products and 18 percent are underbanked.
This mirrors the situation in the region where 50 percent (approx. 300 million people) of Southeast Asia’s population are unbanked and a further 24 percent are estimated to be underbanked. Financial inclusion varies among Southeast Asian countries. Singapore is one of the most financially inclusive countries in the world whereas some 70 percent of Vietnam’s population is unbanked. For the Philippines, it is 65 percent, and for Indonesia, it is 50 percent.
ASEAN aims to create seamless cross-border payments between member states under the ASEAN Payments Policy Framework (APPF), by harmonizing and modernizing payment infrastructures. This will enable ASEAN to ensure that regulatory frameworks can safeguard the service users’ interest, while also promoting innovation and investments in information and technology (ICT) in the region.
Despite the lack of uniform regulations and economic disparities between ASEAN states, market forces driven by consumer and business demands will propel the bloc toward realizing a multi-country real-time network.
Many MSMEs in Southeast Asia have business models that are not compatible with the characteristics of the financial products offered by banks and other financial institutions. That includes aspects such as payment terms for loan schemes, forms of collateral, and credit quality, among others.
Peer-to-peer (P2P) lending is one financing model that has the potential to serve the region’s underbanked and unbanked population.
ASEAN Briefing is produced by Dezan Shira & Associates. The firm assists foreign investors throughout Asia and maintains offices throughout ASEAN, including in Singapore, Hanoi, Ho Chi Minh City, and Da Nang in Vietnam, in addition to Jakarta, in Indonesia. We also have partner firms in Malaysia, the Philippines, and Thailand as well as our practices in China and India. Please contact us at email@example.com or visit our website at www.dezshira.com.