1. http://www.bot.or.th 1 National e-Payment Strategy Presented by Ms. Saowanee Suwannacheep Assistant Governor, Bank of Thailand Conference on “Electronic Commerce Strategies for Development” November 21, 2002

2. http://www.bot.or.th 2  Existing e-Payment in Thailand  Current Problems and Barriers  BOT’s Actions to cope with Problems  Key Success Factors Topics Covered

3. http://www.bot.or.th 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. http://www.bot.or.th 4 Bank of Thailand Payment Services

5. http://www.bot.or.th 5 Bank of Thailand Payment Services

6. http://www.bot.or.th 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. http://www.bot.or.th 7 Limitation of making inter- bank transactions Participati ng Banks Inter-bankIntra-bank BOT Sett. System (all) OR FT (13 ) B2Be Pay (6) Trade Hub (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. http://www.bot.or.th 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.th 9 AGENDA 1: Industry Payment Body AGENDA 3: Payment Legislation AGENDA 2: National Payment Data AGENDA 4: Infrastructure and Standards PAYMENT 2004 AGENDA 5: Cross Border Connection Implementation Plan

10. http://www.bot.or.th 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 Recommendation Strategic Directions Lead Institution Thai Bankers’ Association Related institutions: BOT, FBA, CAT, private companies Agenda 1: Industry Payment Body

11. http://www.bot.or.th 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. http://www.bot.or.th 12 Collaboration of BOT & Industry Payment Body Paym ent Syste ms - Oversight (Risk & Efficiency) Regulator y Power - Set Direction on payment issues Payment Policy BOT Scope: Macro Level Paym ent Syste ms 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 Body Scope: Micro Level Payme nt Associ ation Law (If needed ) Communicate BOT ’ s Regulatory Power and Payment Policy via a Board of Directors

13. http://www.bot.or.th 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 Recommendation Strategic Directions Agenda 2: National Payment Data Lead Institution Bank of Thailand Related institutions: TBA, FBA, CAT, private companies

14. http://www.bot.or.th 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 Recommendations Strategic Directions Lead Institution Bank of Thailand Related institutions: Ministry of Finance, TBA, FBA Agenda 3: Payment Legislation

15. http://www.bot.or.th 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 Recommendations Strategic Directions Agenda 4: Infrastructure and Standards Lead Institution NECTEC Related institutions: BOT, TBA, FBA, private companies

16. http://www.bot.or.th 16 Current Model Payment Provider Central Bank Merchant Bank Online User Merchant Host BAHTNET Media Clearing Bank Host Trade Hub B2B E-pay ORFT Consumer Taxpayer Govt Agency Corporate Inter-bank Settlement Inter-bank Transaction Intra-bank Transaction Inter-bank Transaction

17. http://www.bot.or.th 17 Inter-bank Transaction Conceptual Model Payment Provider Central Bank Merchant Bank Online User Merchant Host BAHTNET Media Clearing Inter-bank Settlement Bank Host Consumer Taxpayer Govt Agency Corporate ITMX Inter-bank Transaction Management & Exchange ITMX B2B2C2G Mobile EBPP Gateway Intra-bank Transaction Inter-bank Transaction

18. http://www.bot.or.th 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 Recommendations Strategic Directions Agenda 5: Cross-Border Connections Lead Institution Bank of Thailand Related institutions: TBA, FBA, Foreign Ministry, Commerce Ministry

19. http://www.bot.or.th 19 CLS ASEAN Regional Payment Gateway Initiative

20. http://www.bot.or.th 20 European Central Bank Swiss National Bank US Federal Reserve Bank of Japan Bank of England Reserve Bank of Australia Bank of Canada Eligible Currencies 2003 : SGD, SEK, NOK, DKK 2004 : HKD, ZAR, KRW New Service for Foreign Exchange Market

21. http://www.bot.or.th 21 To provide a Regional Payment Gateway for efficient, secure & cost-effective clearing & settlement of all cross-border payments in ASEAN ASEANPay Vision

22. http://www.bot.or.th 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. http://www.bot.or.th 23 Q & A Thank You