Does PromptPay have a future?
When PromptPay was launched in Thailand, many feared it would be another failed project. The service was started in January 2017 as part of the Bank of Thailand’s E-Payment initiative — moving the country to digital money. As a government initiative, this was effort was not controlled by a single entity. In early 2017 the Thai banks made an all out promotional push to get citizens to register for the service. Recently we learned that the technology behind PromptPay comes from Mastercard’s Vocalink, and is being deployed in countries like Singapore (PayNow) and the UK for instant fund transfers.
So what is PromptPay and how does it work? Those of you old enough to be online in 1997 may remember the internet company called Bigfoot.com would let you create an xxx@Bigfoot.com address that would forward all your mail to your hotmail.com, aol.com or excite.com emails. For people changing their email often (as we did in those days) this forwarding email was an easy address to give out that would forward on all email received to your main account. So as a Bigfoot email and acts as a proxy for you main email, a PromtPay ID is a proxy for your Thai bank account number.
PromptPay uses a Thai Phone Number, Thai ID or Company registration number as a proxy / forwarder for one of your Thai bank accounts. Therefore if you give someone your PromptPay ID, there is no longer a need to additionally include your bank account number and bank name.
This reduction of information needed to send funds to someone is the first major benefit of Promptpay. Vocalink, the developer of this technology, calls this a Real-Time Payments Switch (IPS) and a Multi Proxy Platform (MPP).
This means PromptPay is not a e-wallet, app, or company, but rather a government sponsored protocol to enable easier bank to bank transfers, in a country where it’s already quite easy to move funds cross banks.
Unlike something like Zelle in the USA where delays can happen due to fraud checks and other monitoring, PromptPay payments follow in the footsteps of instant bank to bank transfers. And unlike Paypal, PromptPay payments can not easily be reversed. Only in cases of crime, and bank error will you see funds reversed. The “get paid, stay paid” use case of PromptPay beats out any payment processor or company e-wallet.
Traditionally Thai banks have charged an inter bank fee of 25–35 Baht to move money from one bank to another. So the the second major benefit of PromptPay is the lower fee structure for bank to bank transfers which is as follows:
- Under 5,000 baht — Free
- Under 30,000 Baht — 2 Baht
- Under 100,000 Baht — 5 Baht
- Under 150,000 Baht — 10 Baht
These fees are paid by the sender, and there is no fee for receiving the funds. This structure allows for free fund transfers between users, in line with many of the other wallets and platforms out there like Alipay, Venmo, Zelle, and WeChat Pay.
To stay competitive, Thai banks have since dropped their own bank to bank transfer bank fees. Where you would have previously paid 70 THB to send 100,000 Baht from a Kbank to an SCB Bank, it’s now a free transfer.
As stated above, anything under 5,000 Baht ($156.00) is a free transfer with PromptPay and you can send as little as .01 Baht ( 1 Satang ). This is an area that Credit / Debit Cards and PayPal have completely failed at. Try sending a 1 Baht transfer with Paypal and you see they will take 100% of it in fees!
QR Codes for Payments
While not a requirement, PromptPay can make use of the QR code to deliver both the payment ID and the amount. The QR codes are generated using the EMV QRCPS Merchant Presented Mode specification. There are further technical details listed on the Bank of Thailand website. The inner workings of this QR code creation can be seen in this code snip. The necessary variables are embedded so that any app able to read this QR code will know the country, currency, and other particulars.
const GUID_PROMPTPAY = "A000000677010111"
const TRANSACTION_CURRENCY_THB = "764"
const COUNTRY_CODE_TH = "TH"
All a user needs to do is enter a payment ID and optionally an amount value. Once a string of payment information is created it would look like this:
This QR code shown here has a payment ID and amount embedded into it:
The main point of the QR code option is that it removes the need for the sender to enter any account numbers or amounts. This is a clear improvement in saving time an reducing errors when exchanging bank account / phone numbers.
If you want to generate your own PromptPay QR code, take a look at PromptPay2.me. Enter a PromptPay payer ID and amount to generate your own QR code. This code can be used by anyone to make a payment of the specified amount. Or better yet, you can include the whole transaction into a url string at Promptpay.io. Send the link to anyone for an easy payment.
Local banks are coming out with their own PromptPay merchant apps. For example there is True Merchant 4.o, K Plus Shop, and SCB Easy Pay. These all hope to capture Point of Sale transactions and provide a layer of additional information and extras on top of the basic transaction.
Wait, is this Decentralized?
Nope, it’s technology developed by Vocalink and uses the ISO 20022 standard.
How a payment is made
Payments will originate from online banking or a mobile wallet from a bank or e-wallet service in Thailand. To make a PromptPay payment, you are not required be registered with PromptPay, however some applications may require it. You do of course need a Thai bank or e-wallet account.
Inside of your bank app will be an option to scan a QR code. Scanning a code, like the one above, opens access to your phone’s camera and then is able to read the data embedded in the QR code.
How to start
Authorities have claimed over 31 million PromptPay accounts have been created. Mostly this quick adoption has happened as the Thai Government wishes to use this system to push out social benefits and tax returns. Most government workers have been required to enroll.
To start usingPromptPay you need:
- A Thai bank account or wallet app
- A Thai mobile number or National ID
Then you need to connect your ID/phone number to your bank account at your bank of choice — your ID then becomes a proxy for that bank account. This connection is done on your bank site or app. Foreigners can get get registered for PromptPay as well.
Where PromptPay is being used
Currently you may find a PromptPay QR code at 20–30% of business nationwide. This is mainly due to the big bank push, to secure a user’s connection to that bank. Some users report the special POS versions of the QR code taking up to 2 minutes, but normally speed depends on you, and how fast you can open your app, scan and pay.
Some interesting applications
Prompt pay will open up many interesting opportunities if allow to flourish. Here are just a few:
- Vending machines that don’t need trusted money pick ups
- Easy, realtime donations at live events
- Pay to vote applications
- Exchange THB to other digital curriences
- Digital locks, that open when paid
- Parking meters
- Virtual stickers, gifts or games lives costing a few baht
If you have activated PromptPay on your phone number, anyone with that number will be able to look up your full name. Any person that pays you, will see your full name as well. And of course, now the Thai Government, and possibly Vocalink (Mastercard) have a record of your Name, Phone, and all of your PromptPay transfers.
Where do we go from here
The world is rapidly moving to accept digital money and Thailand has a very reasonable digital money solution. There are many advantages that will ensure that PromptPay has a successful adoption in the Thai market. Additionally PromptPay opens opportunity for many innovative uses. Personally I would predict 80% of daily payments made using PromptPay within 5 years.
Have you seen PromptPay in action? Have you used it? Leave a comment below.
And, Thank you to the person who sent 4.37 Baht at 9:15 am on Aug 16th!