Fee waivers could cost the banking system as much as $288.45m in foregone revenue.
The popularity of mobile banking is poised to lessen the profit-loss margin of Thai banks as major lenders moved to waive fees for transfers and bill payments in a bid to compete against non-traditional and fintech players.
“Fee waivers will have some effect on banks’ profit, but we expected mobile and Internet banking will lower the overall cost,” said Thai Bankers’ Association chairman Predee Daochai.
This comes as major commercial lenders Siam Commercial bank, Kasikornbank, Bangkok Bank, Kiatnakin and Krung Thai Bank decided to waive transactions done via phone or computer which could cost the local banking system as much as $288.45m (TB9b) in foregone revenue. The move comes as consumers are increasingly turning to a slew of digital alternatives including government-backed PromptPay, TrueMoney offered by telco firm True Corporation Pcl, and startup Omise for their money transfer needs.
However, Daochai remains confident that mobile banking is set to offset the impact. According to data from the Bank of Thailand, the number of transactions via mobile platforms jumped to almost $32.05m (TB1b) in 2017 which far exceeds credit card and cheque usage.
Fee income can also help offsetting the negative impact on the profitability of Thai banks, he added.
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