Seven Peaks Insights

How Cross-Border QR Payments Empower Global Commerce

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The widespread adoption of QR codes for in-store payments throughout Thailand, along with the COVID-19 pandemic's influence pushing all sectors toward contactless transactions, has notably altered Thai consumers' spending behaviors, propelling a trend towards a "cashless society." This shift has prompted the emergence of cross-border payments, which are gaining significance for businesses, notably in the FinTech sector.

This article elaborates on the concept of cross-border payments and their significance for businesses, particularly in the FinTech ecosystem. Additionally, we'll explore strategies for identifying opportunities and developing your business in the digital era.

What is Cross-Border Payment?

Cross-border payments encompass various methods of financial transactions conducted across international borders, ranging from credit card and debit card payments to bank transfers, cryptocurrencies, and digital assets. In this article, we focus on the cross-border QR payment system introduced by the Bank of Thailand (BoT), commonly referred to as cross-border payment.

Developed in collaboration with numerous commercial banks in Thailand and abroad, the cross-border QR payment system facilitates seamless transactions for Thai and foreign individuals in supported countries, offering convenience, user-friendliness, and heightened security.

This system addresses the challenges often encountered by global tourists, including the inconvenience of carrying large sums of cash, concerns about currency loss or counterfeit bills, and the burden of high transaction fees, typically ranging from 1.5% to 4%, as well as exchange rate fluctuations.

In Thailand, the foundation of the cross-border QR payment system lies in the Thai QR Payment system, which is already familiar to residents for cashless payments.

Originating from the ASEAN Payment Connectivity project initiated in 2019, the BOT aimed to establish a system that would facilitate more convenient and efficient payment transfers among countries in the ASEAN region. Since then, the system has continuously developed and is operational in seven countries, including Cambodia, Vietnam, Malaysia, Indonesia, Singapore, Japan, and most recently, Hong Kong. There is a growing inclination to expand its support to other Asian regions soon, such as India.

ASEAN Banks Supporting Cross-Border QR Payments

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Information by BoT

The chart indicates that the integration of cross-border QR payment among Thai banks is not yet across the board. It is crucial to identify the limitations or hurdles hindering the participation of certain Thai banks in this initiative. Given the potential advantages, the long-term investment prospects make this aspect particularly intriguing.

The Benefits It Unlocks

For Consumers

  • Enhanced financial accessibility: Consumers have better access to financial services, catering to individual needs and financial management.
  • Swift transactions: The process ensures prompt processing, granting consumers immediate outcomes.
  • User-friendly experience: This convenience eliminates the need for carrying bulky cash or concerns about counterfeit currency.
  • Simplicity: Cross-border QR payments boast straightforward usage, with consumers only required to scan a QR code and input the payment amount.
  • Transparent transactions: This payment method provides clarity, enabling consumers to view the precise transaction amount before payment.
  • Robust security: This type of payment prioritizes security by processing through standardized channels.

For Businesses

  • Enhanced customer attraction: QR payments streamline the payment process, potentially boosting sales and attracting more customers.
  • Reduced cash management costs: This method eliminates the need for businesses to handle physical cash, resulting in time and cost savings.
  • Enhanced security: QR code payments utilize encryption to safeguard customer data, ensuring secure transactions.
  • Revenue growth: This payment method simplifies the payment process, potentially leading to increased sales and revenue for businesses.
  • Elevated customer satisfaction: It also offers convenience and ease of use, contributing to higher levels of customer satisfaction.
  • Deeper data insights: Utilizing this payment method helps generate valuable data on customer behavior, providing businesses with insights to optimize marketing and sales strategies.

Cooperations and Successful Cases 

  • Siam Commercial Bank (SCB) has collaborated with KB Kookmin Bank and GLN International to introduce a cross-border QR payment system tailored for Korean tourists visiting Thailand, accessible through SCB's mobile application.
  • Foreign tourists in Thailand have conducted over 300,000 transactions using cross-border QR payments, totaling more than 400 million baht.
  • Vietnamese tourists in Thailand increased their spending through cross-border QR payments from 800,000 baht in May 2022 to 4.8 million baht in June, marking a 500% increase.
  • QR codes are gaining popularity in Thailand beyond counter payments. They are being utilized in various other ways such as e-commerce, memberships or subscriptions, concert tickets, donations, and more. Leading companies like Stripe, specializing in cross-border payment technology, offer APIs that accommodate all payment forms, including QR codes. Through Stripe's API, businesses can seamlessly accept QR code payments from customers worldwide, facilitating global expansion and enabling sales to a broader audience.

Develop Your Payment Solutions

Cross-border payment presents a significant opportunity for Thai FinTech businesses to achieve exponential revenue growth. However, to seamlessly participate in this ecosystem, businesses require an efficient system capable of scaling to support a vast number of users.

With extensive experience in providing software development services and facilitating digital transformation for leading clients, we are well-equipped to assist you. Contact Seven Peaks today to discover how we can help you capitalize on the cross-border payment opportunity.