Thailand is in the process of reforming laws related to payment systems and services, as well as consolidating several overlapping laws that regulate electronic money businesses, with the National Legislative Assembly approving the new Payment Systems Act in August 2017. The new draft of the bill is awaiting royal assent and is expected to be published in the Government Gazette within this year, becoming effective 180 days after its publication.

Under the current system, a business that wishes to provide a certain type of e-money service is required to apply for two licenses, in accordance with two laws: (1) the Royal Decree Regulating Electronic Payment Services B.E. 2551 (2008); and (2) the Notification of the Ministry of Finance: Business that Requires a Permit according to Section 5 of the Notification of the Revolution Council No. 58 (Electronic Money Card Businesses), dated October 4, 2004. Once the new Payment Systems Act comes into force, it will simplify procedures for business operators by repealing these laws.

Under the new law, different types of electronic payment systems and businesses will be reclassified into three new classifications: (1) important e-payment systems; (2) supervised e-payment systems; and (3) supervised e-payment services. Criteria for supervised e-payment systems and e-payment services will be determined in ensuing subordinate legislation by the Minister of Finance, based on recommendations from the Bank of Thailand (BOT). 

Current business operators will be required to reapply for registrations or licenses if their businesses fall within the category of a supervised e-payment system or a supervised e-payment service. Certain new businesses that fall under either category may be required to apply for registration, rather than applying for a license (e.g., new businesses utilizing new financial technology that are in the process of being tested, or providing services to a limited number of customers which may not significantly impact public interests).

The BOT will be the key regulator of the new Payment Systems Act and will supervise the operation of payment systems and payment services, with the Electronic Transactions Commission supervising information technology security standards. The law grants the BOT the authority to announce rules and regulations relating to: 

• minimum financial status and performance;
• business operation standards;
• good governance;
• risk management;
• outsourcing;
• collection and disclosure of a customer’s personal data;
• customer protection; and
• security systems. 

Business operators and their management will be required to submit financial statements, operations reports, accounts, and data relating to the business operations, in any form, with the BOT having the authority to examine business operations, assets, and debts of business operators. In the case of noncompliance, the BOT may order business operators to rectify any associated problems, or it may impose a temporary suspension or cessation order within a specified period. Noncompliant business operators may be subject to administrative fines of up to THB 3 million, and criminal penalties that include imprisonment of up to 10 years and/or fines of up to THB 10 million.

Reformation of the payment systems law in Thailand will result in more streamlined license application and compliance obligations for business operators, as well as the establishment of an effective regulatory framework to support the development of e-payment services and businesses under the government’s “Thailand 4.0” policy.