Http:// 1 National e-Payment Strategy Presented by Ms. Saowanee Suwannacheep Assistant Governor, Bank of Thailand Conference on “Electronic

1

http://www.bot.or.th

National e-Payment Strategy

Presented byMs. Saowanee

SuwannacheepAssistant Governor,

Bank of Thailand

Conference on “Electronic Commerce Strategies for

Development”

November 21, 2002

2


I. Existing e-Payment in Thailand

II. Current Problems and Barriers

III.BOT’s Actions to cope with Problems

IV.Key Success Factors

Topics Covered

3


I. Existing e-Payment in

Thailand

Other Payment Products : ORFT, Trade Hub, B2B e-Pay, Internet Banking, Telephone Banking, Mobile Banking

Core e-payment Systems : BAHTNET, Media Clearing

Customers

4


Bank of Thailand Payment Services

64,375 .00

16,785 .00

183 .00

0.00

10,000.00

20,000.00

30,000.00

40,000.00

50,000.00

60,000.00

70,000.00

BAHTNET Cheque(Interbank)

MediaClearing

Value of transactions in 2001 (Billions Baht)

5


738,159

74,728,475

5,758,452

N.A.

10,000,000

20,000,000

30,000,000

40,000,000

50,000,000

60,000,000

70,000,000

80,000,000

BAHTNET Cheque(Interbank)

Media Clearing

Volume of transactions in 2001

Bank of Thailand Payment Services

6


II. Current Problems and Barriers

1. Inconvenience access to new technologies and the internet

2. Payment systems provided by BOT ( BAHTNET, Media Clearing) are yet to be linked to cross border.

3. Lack of open network structure in inter-bank connections (except BAHTNET, Media Clearing)

4. The usage of modern security infrastructure and technology is not widespread.

5. Public lack of profound technology know how and can not afford to employ such technology.

7


Limitation of making inter-bank transactions

Participating Banks

Inter-bank Intra-bankBOT Sett.

System(all)

ORFT(13)

B2BePay(6)

TradeHub(6)

Internet Banking

(16)

TFB, BBL, BAY

SCB, KTB

BOA

TMB

BT

DBS, SCIB, UOB, NTB, GHB

Citi, Tokyo, Deutsch, BNP, Mizuho, Std Chart, JPMorgan, ThanaChart, HSBC

Others (14)

8


III. BOT’s Actions to Cope with the Problems

1. Joining regional and international initiatives on payment issues:

- APEC, EMEAP, SEACEN, BIS

2. Restructuring IT systems and Data Linkage between BOT and FI:

-BOT’s IT strategy, FI DMS, Inter-bank Payment Systems Development toward E-FITS

3. Implementing the BOT Strategic Objectives for the year 2003-2007 on the issue relating to e-payments by;- Facilitating the development of payment systems that can fully serve all activities

relating to e-commerce and making sure that the systems are complied with the BIS Core Principles .

4. Charting the payment strategic directions for 2002-2004 (Payment 2004 Project) as a road map for safe, sound, and efficient payment systems in Thailand which will greatly support e-payment.

9

http://www.bot.or.thhttp://www.bot.or.th

AGENDA 1:Industry Payment

Body

AGENDA 3:Payment

Legislation

AGENDA 2:NationalPayment

Data

AGENDA 4:Infrastructure

andStandards

PAYMENT 2004

AGENDA 5:CrossBorder

Connection

Implementation Plan

10


• Establish Thailand Payments Association in consultation with the market

• Key driver is the need for co-operation and co-ordination in the payment market

RecommendationStrategic Directions

Lead Institution

• Thai Bankers’ Association

• Related institutions: BOT, FBA, CAT, private companies

Agenda 1: Industry Payment Body

11


I. Regulatory Issue

Set rules, procedures and standards on payment issues to ensure efficiency, safety and fair competition in payment systems.

II. Payment Policy Issue

Facilitate the setting up & operating of national payment systems, methods and technologies.

Facilitate the linkage of payment systems under its umbrella with other local and international systems.

Compile payment data and researches relating to payment issues.

Be a forum for cooperation among payment service providers on the payment issues.

Industry Payment Body

CORE RESPONSIBILITY

12


Collaboration of BOT & Industry Payment Body

Payment Systems

- Oversigh

t (Risk &

Efficiency)

Regulatory Power

- Set Direction on payment issues

Payment Policy

BOTScope: Macro Level

Payment

Systems

Law

- Rules / Procedure / Standards

Regulatory Power

-Facilitate the setting up and operating of new payment systems, method and technologies under BOT’s direction.

Payment Policy

Industry

Payment BodyScope:

Micro LevelPayment

Association Law

(If

needed)

Communicate BOT’s Regulatory

Power and Payment Policy

via a Board of Directors

13


• Conduct an annual survey of national payment data led by the central bank in close co-operation with industry

• Key driver is the market need for payment data to support decision-making and policy-making

• Assessment of current payment market in Thailand

• Compile and maintain industry payment statistics

• Support central bank policy making in payment systems

• Forecast future payment trends

RecommendationStrategic Directions

Agenda 2: National Payment Data

Lead Institution

• Bank of Thailand

• Related institutions: TBA, FBA, CAT, private companies

14


• Study and introduce a new Payment Systems Act to safeguard financial stability

• Key driver is the need for an explicit legislation on payment systems to safeguard financial stability

• Purpose is to regulate payment systems to control risks in the financial system and to promote their efficiency and stability

RecommendationsStrategic Directions

Lead Institution


• Related institutions: Ministry of Finance, TBA, FBA

Agenda 3: Payment Legislation

15


• Develop a common payment platform based on interoperable standards

• Key driver is the need to develop a common payment platform based on interoperable standards to reduce duplicative payment infrastructure investments and to support the growth of e-commerce

• Develop a complete Straight Through Processing (STP) in payment circle


Agenda 4: Infrastructure and Standards

Lead Institution

• NECTEC

• Related institutions: BOT, TBA, FBA, private companies

16


Current ModelCurrent ModelPayment Provider

Central Bank

Merchant Bank OnlineUser

MerchantHost

BAHTNET

Media Clearing

Bank HostTradeHub

B2B E-pay

ORFT

Consumer

Taxpayer

Govt Agency

Corporate

Inter-bank Settlement

Inter-bank Transactio

n

Intra-bank TransactionInter-bank Transaction

17


Inter-bank Inter-bank Transaction Transaction

Conceptual ModelConceptual ModelPayment Provider

Central Bank

Merchant Bank OnlineUser

MerchantHost

BAHTNET

Media Clearing

Inter-bank Settlement

Bank Host

Consumer

Taxpayer

Govt Agency

Corporate

ITMX

Inter-bank Transaction Management & Exchange

ITMX

B2B2C2G

Mobile

EBPP

Gateway

Gateway

Gateway

Intra-bank TransactionInter-bank Transaction

18


• (1) Study and consider connecting BAHTNET to a large-value cross-border payment system to reduce foreign exchange settlement risk and (2) Study and consider connecting Media Clearing to a small-value cross-border payment system

• Key driver includes the needs to develop cross-border payment systems to facilitate foreign trade, to support the growth of cross-border payments, to lower payment charges, and to reduce foreign exchange settlement risks


Agenda 5: Cross-Border Connections

Lead Institution


• Related institutions: TBA, FBA, Foreign Ministry, Commerce Ministry

19


• CLS•ASEAN Regional Payment Gateway Initiative

20


European European Central BankCentral Bank

Swiss National BankSwiss National BankUS Federal ReserveBank of JapanBank of Japan

Bank of EnglandBank of England Reserve Bank of Australia

Bank of CanadaBank of Canada

Eligible Currencies

2003 : SGD, SEK, NOK, DKK 2004 : HKD, ZAR, KRW

New Service for Foreign Exchange Market

21


To provide a Regional Payment

Gateway for

efficient, secure & cost-effective

clearing & settlement of

all cross-border payments in

ASEAN

ASEANPay Vision

22


IV. Key Success Factors

Recognition of each stakeholder’s new roles

Utmost collaboration among key stakeholders - BOT and Industry Payment Body - Banks and Non-banks under the umbrella of Industry Payment Body (Turn competition into collaboration)

BOT’s leading roles in promoting, supporting

and facilitating in any aspects deemed appropriate

and necessary.

23


Q & A

Thank You

Documents

Http:// 1 National e-Payment Strategy Presented by Ms. Saowanee Suwannacheep Assistant Governor, Bank of Thailand Conference on “Electronic