Vietnam and Thailand have officially launched the QR payment linkage project, presided over by H.E. Nguyen Xuan Phuc, the President of the Socialist Republic of Vietnam, along with Arkhom Termpittayapaisith, the Minister of Finance of Thailand.
This has come after the State Bank of Vietnam and the Bank of Thailand launched their QR payment services in March 2021. This created an alternative means of cross-border payments between the two countries.
To illustrate the practical use case of this linkage, Nguyen Kim Anh, deputy governor of the State Bank of Vietnam and Ronadol Numnonda, his counterpart from the Bank of Thailand, participated in live demonstrations of cross-border QR payments between Vietnam and Thailand, using mobile banking applications of their respective countries.
This event showcased the successful application of the cross-border payment linkage between Vietnam and Thailand. It facilitated customers and tourists as well as merchants to make and receive payments. They were able to do so with convenience, speed, security, transparency and at low cost.
Furthermore, this project promotes the use of local currencies for payments and settlements as well.
The cross-border QR Payment Linkage between Thailand and Vietnam has been initiated by the Bank of Thailand and the State Bank of Vietnam. Participating commercial banks from both countries will both be taking part.
This service enables tourists from both countries to make payments for goods and services via mobile banking applications of participating banks by scanning the standardised QR Code of both countries namely Thai QR Payment and VietQR. The service serves as a fast, convenient, and low-cost alternative payment method to enable cross-border transaction and marks an important milestone for ASEAN Payment Connectivity initiative to promote sustainable growth and regional financial development.
QR payments benefits
According to the data of Juniper Research, the total number of QR code payment users is expected to exceed 2.2 billion in 2025, up from 1.5 billion in 2020; equating to 29 per cent of all mobile phone users across the world in 2025.
It’s undeniable that this popular form of paytech is here to stay. But what are the benefits of QR code payments?
Pete Janes, CEO and founder of paytech Shieldpay, reviewed where QR payments developed : “In the payments world, the benefits of QR codes were first realised in Asia, when small merchants or street vendors used them due to the lack of infrastructure for POS systems.
“Customers with digital wallets were then able to send funds directly to the wallets of the merchant, without the hassle of POS or card payments. These same benefits hold true across the world, offering direct and simple payments for anyone with a modern phone camera.
“Today, the benefits of QR codes extend beyond fiat currencies and into even cryptocurrencies. QR codes are now the most efficient and popular way to send or spend cryptos. This, again, bypasses the need for terminals or a third-party processor.”
Thailand is digitising
Digital payments were commonplace in most countries but this wasn’t the case in Thailand pre-pandemic. According to J.P. Morgan‘s 2020 E-commerce Payments Trends Report, e-commerce accounted for just two percent of overall retail, with only 23 percent of the Thai population having shopped online. However, there was a clear drive for digitisation and mobile payments.
Two years later, this is more evident than ever, as Google Pay launched in the country. A luxury other countries have had for years, Thai Android users can now pay using their devices.
In addition to this, users can store credit cards and make payments with a simple tap of the phone or their watch. Cardless ATM was introduced by many banks: Google Pay means users won’t need to carry credit cards around any longer. Only Bangkok Bank and KTC credit cards have access. According to Lifestyle Asia, there are hopes that more banks will be added more soon, as well as the ability to store debit cards.
Cash remains king
Despite these positive changes, cash does remain king in the country. Currently, it is between five per cent to 10 per cent of cheaper to use cash than electronic payment systems. This is largely due to their inbuilt fees and charges. Thailand is not showing signs of slowing its digitisation though. It joined four other Southeast Asian central banks in creating a cross-border payment zone that uses QR codes and avoids converting and reconverting to US dollars.
Thailand’s Central Bank is pushing forward with a plan to reduce cash in circulation by 50 per cent by 2026 when compared to the end of 2021. According to Thai Examiner, the Central Bank plans to have 42 per cent of all payments in the kingdom made by digital means by the end of 2024 with each person making 800 such payments in the course of a year.