Thai Banks Working On New Service Fees

[george]

Bankers working on new service fees

BANGKOK: -- The Thai Bankers' Association and the Bank of Thailand are working out an appropriate new level of service fees for retail customers, TBA president Apisak Tantivorawong said on Friday.

"We and the central bank will restructure banks' service charges for retail customers," said Apisak, who is also president of Krung Thai Bank.

His comment came after Finance Minister Korn Chatikavanij said last Monday he had asked the central bank to look into the high service fees imposed on customers by banks.

Korn, blaming low completion in the banking sector, is concerned that banks have taken advantage of customers by imposing high charges, resulting in rapidly growing fee-based income for the institutions.

Apisak, however, said that as most customers still preferred to use cash, this added to banks' operating costs.

"We Thais are a cash-culture people, and banks, for example, have to carry large amounts of money to fill ATMs, which increases their costs," he said.

He said people in developed economies tended to make much greater use of credit and debit cards, which meant foreign banks' costs were much lower.

Promoting the use of plastic money in Thailand would help, he added.

Thai banks also suffer from a much higher cost of investing in information technology than their larger counterparts in other countries.

"The cost of an IT investment is the same for both smaller and larger Thai banks, whereas larger foreign banks have only one-tenth of Thai banks' IT investment costs on average," Apisak said. According to the TBA website, banks charge Bt12 per "smart" credit interbank transaction (interbank deposit) for deposits up to Bt10,000, Bt40 per deposit from Bt10,001 to Bt50,000 and Bt100 per deposit from Bt50,001 to Bt2 million.

Meanwhile, the smart debit service is charged at Bt15 per transaction up to Bt10,000 for an interbank withdrawal, Bt20 per withdrawal from Bt10,001 to Bt50,000 and Bt50 per withdrawal from Bt50,001 to Bt250,000.

Customers making interbank money transfers are charged Bt25 per transaction up to Bt10,000 and Bt35 per transaction from Bt10,001 to Bt30,000.

-- The Nation 2010-03-01

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[whichschool]

I feel really sorry for Thai banks and their high running costs, i almost cried whilst reading that.

[givenall]

It’s very hard to get ahead in this country. The elites and rich have corner the market with the monopoly they have and the restriction the government has and will put in place if any other one want to start competing with these big companies. For example one way for the government stops the competition is with high export taxes or difficulties to get permit unless you are connected.

But I guess grid hs no limit and now bangs want the little money the business make too

[eldar1]

To be honest the banking fees in Thailand are pretty low at least compared to Holland and the US. The only 2 real strange fees are the 150baht foreign atm card fee and the 600 baht incoming foreign T/T fee.

[pontious]

Bangkok Bank charges 0.25% for TT / Where do you get 600 Baht from?

[eldar1]

you are correct they charge 0.25% of the transfer but 500 baht is the max they charge, i thought it was 600 for some reason, oh well my mistake.

[hardy1943]

To be honest the banking fees in Thailand are pretty low at least compared to Holland and the US. The only 2 real strange fees are the 150baht foreign atm card fee and the 600 baht incoming foreign T/T fee.

Apparently you never belonged to a credit union in the US mine Cascade Federal never charged me nothing for the last ten years.I can charge things in Thailand NO EXTRA CHARGES .........THAI BANKS ARE A RIPP OFF

[bangon04]

It's very hard to get ahead in this country. The elites and rich have corner the market with the monopoly they have and the restriction the government has and will put in place if any other one want to start competing with these big companies. For example one way for the government stops the competition is with high export taxes or difficulties to get permit unless you are connected.

But I guess grid hs no limit and now bangs want the little money the business make too

Just let HSBC and UOB and Standard Chartered operate retail banking in Thailand without preconditions - market forces only. In 6 months the Thai banks will either become competitive or disappear.

[moetownblues]

To be honest the banking fees in Thailand are pretty low at least compared to Holland and the US. The only 2 real strange fees are the 150baht foreign atm card fee and the 600 baht incoming foreign T/T fee.

Well there is a very nice cash flow market there to be milked. Don't worry these fees will not go over looked and I am sure these fees will double

[khundon]

"Promoting the use of plastic money in Thailand would help, he added".

Yeah sure, with Thailand being near the top of the list of countries that have the worst card crime in the World.

Have your identity stolen in the West and you can be sure your money will be nicked in the South East.

[jonclark]

" Thai banks also suffer from a much higher cost of investing in information technology than their larger counterparts in other countries."

Is that because of the 'tea money' which must be added into the costing. Love the way the banks allocate blame for this presumable increase in fees on their customers love of money, rather than plastic. Upcountry most local shops (restaurants, street vendors, petrol, grocery) don't take visa - Some rich banker, living in a bubble assuming all of Thaialnd shops at the Emporium or like.

[tartempion]

To be honest the banking fees in Thailand are pretty low at least compared to Holland and the US. The only 2 real strange fees are the 150baht foreign atm card fee and the 600 baht incoming foreign T/T fee.

Strange, In Belgium I have a fee-less bank account: no charge at all for account management, debit card, credit card, withdrawals at any ATM in Europe etc.

[monty]

And I already get annoyed now when people in front of me at the check out counter are paying their 300 Baht bill with a card and the resulting 1 minute plus time it takes to clear the charge...

[jfchandler]

Hardy, we're mixing apples and oranges here...

You seem to be talking about using a credit card in Thailand. And indeed, there are a few banks/CUs/cards that don't charge foreign surcharges (1-4%) on transactions/purchases made outside the U.S. Capital One and Charles Schwab Bank are probably the largest of those no fee credit cards.

However, the 150 baht foreign atm card fee that Eldar is citing is the fee that Thai banks charge foreign customers whenever they make an ATM cash withdrawal here. In that case, it doesn't matter what U.S. card you're using. If you withdraw from a Thai ATM using ANY U.S.-based bank card, the Thai bank will add a 150 baht flat fee.

There are two exceptions to that general situation: 1) a fairly few U.S. banks and CUs will reimburse all ATM charges for their customers, including foreign ones. E*Trade, Charles Schwab, Fidelity and a few others do that. So in that case, the Thai bank charges you the fee and the U.S. bank refunds it. And 2) there is one variety of ATM in Thailand (those that are part of the AEON network) that still are fee-free. But AEON is not a bank, rather, a Japanese-based credit card company that also runs ATMs here.... If you need to use an ATM in Thailand, use AEON....

To be honest the banking fees in Thailand are pretty low at least compared to Holland and the US. The only 2 real strange fees are the 150baht foreign atm card fee and the 600 baht incoming foreign T/T fee.

Apparently you never belonged to a credit union in the US mine Cascade Federal never charged me nothing for the last ten years.I can charge things in Thailand NO EXTRA CHARGES .........THAI BANKS ARE A RIPP OFF

[moetownblues]

And I already get annoyed now when people in front of me at the check out counter are paying their 300 Baht bill with a card and the resulting 1 minute plus time it takes to clear the charge...

My wife does this and it annoys me also. When I ask her not just pay cash for such a small amount she replies "I will not get points on my card" apparently the bank sends her out a small gift at the end of the year. Thai thinking I guess.

[Wolfie]

We Thais are a cash-culture people

No!?! Really!?! Who would have guessed it!!!

[puyaidon]

Some banks in the US charge customers more for using the bank tellers rather than an ATM. ATM's are cheaper in those banks if not free. How anyone can say that just because you have to fill an ATM with cash and it costs more than using a teller must be really tripping. It sounds like Thailand banks want to return to the stone ages rather than modernize their operations.

I don't understand why the banks charge the 150 baht for ATM withdrawal of foreign funds but some banks in the US do reimburse the fee every month.

I understand the majority of the banks here are family owned and may charge more. I read an article in a Thailand English language newspaper years ago that quoted this. Long before UOB and the newer banks came to Thailand. That may have some bearing on service fees, I don't know but can only guess.

Edited March 2, 2010 by puyaidon

[jfchandler]

The Thai banks charge the 150 baht withdrawal fee on most foreign ATM withdrawals (I say "most," because there are a very few quirky situations where this can be avoided by folks from some countries) because they CAN.... given that there's no meaningful, open market competition for banking services here.

And if the Thai banks and/or government want people here to start using debit/ATM cards more instead of cash, they'd better start modernizing their consumer protection laws relating to fraudulent debit/ATM card use.

Here in Thailand, if your Thai bank card gets stolen and used fraudulently, you can lose however much the thieves can manage to drain from your account before the card is reported stolen and frozen. As far as I'm aware, there are NO requirements that Thai banks reimburse customers for fraudulent transactions or limiting consumer liability for them.

[lannarebirth]

It's interesting to see the collusion between companies in a major segment of the economy, out inthe open, and with government approval no less.

Edited March 2, 2010 by lannarebirth

[sawadeeken]

When I read the original news item, for a moment I thought they may be contemplating a reduction in the Foreign user ATM fee............... No such luck.................. dream-on, sucker!!!!!!!!!!!!!!!!!!!

[toptuan]

To be honest the banking fees in Thailand are pretty low at least compared to Holland and the US. The only 2 real strange fees are the 150baht foreign atm card fee and the 600 baht incoming foreign T/T fee.

Apparently you never belonged to a credit union in the US mine Cascade Federal never charged me nothing for the last ten years.I can charge things in Thailand NO EXTRA CHARGES .........THAI BANKS ARE A RIPP OFF

My sentiments as well. I've never had a charge against my account at my USA credit union in over 20 years.

Here, when I travel more than 50-60 miles from home, which usually puts me in another province, my Thai bank immediately starts charging ATM withdrawal fees, just like interbank withdrawals in the USA. Dealing with a separate branch of your own bank here, is like dealing with another completely different institution--different account-opening requirements, different documentation, extra fees as if you were a customer of another bank, etc.

It's ridiculous.

And on another sub-topic...

And if the Thai banks and/or government want people here to start using debit/ATM cards more instead of cash, they'd better start modernizing their consumer protection laws relating to fraudulent debit/ATM card use.

Here in Thailand, if your Thai bank card gets stolen and used fraudulently, you can lose however much the thieves can manage to drain from your account before the card is reported stolen and frozen. As far as I'm aware, there are NO requirements that Thai banks reimburse customers for fraudulent transactions or limiting consumer liability for them.

And if merchants stopped charging 3%-5% for every credit card use, people might start using the credit cards more often. In my home state back in the USA, it's illegal for merchants to charge a fee for credit card use. I've basically stopped using my credit card in Thailand due to fraudulent uses of my credit card number (thanks to unscrupulous Thai merchants), and the fees every merchant loves to tack on.

If Thailand could get its act together in the consumer-friendly and fraudulent crime department, their IT expenses would come down considerably.

TBA president Apisak Tantivorawong is setting up a straw man argument to deflect public sentiment away from the real problems of the Thai consumer financial system. The way we do things in LOS: Blame the wrong thing so you can continue business as usual.

[jfchandler]

TT, in my years of living here, I've never had a Thai merchant try to pass on an extra charge to me, 3-5% or whatever, if I was trying to pay with a credit card.

I have had a lot of Thai merchants, mostly smaller, decline to take credit cards, or only accept them if the purchase amount is over 500 baht, or similar amounts like that...

On the other hand, most U.S. banks (and certainly all of the largest ones) DO charge their credit card customers an add-on fee of anywhere between 1% and 4% for all credit card transactions made outside the U.S. or made in foreign currency. That's where the bigger fees are getting tacked on.

Re fraudulent use, if you're using a U.S.-based credit or debit card, the U.S. banking laws are going to protect you pretty well...apart from the hassles and lost time in reporting the loss and then having to change anything/everything related to the compromised account. At least, within a relatively short period of time, you can expect to get the fraudulent charges reversed.

In Thailand, for now, good luck about trying that...

And if merchants stopped charging 3%-5% for every credit card use, people might start using the credit cards more often. In my home state back in the USA, it's illegal for merchants to charge a fee for credit card use. I've basically stopped using my credit card in Thailand due to fraudulent uses of my credit card number (thanks to unscrupulous Thai merchants), and the fees every merchant loves to tack on.

[puyaidon]

I disagree with the commentator about not getting reimbursed for fraudalent use of credit cards here in Thailand.

I have an GE Visa card from Bank of Ayudhya and one day while checking my account online, I noticed a 41,000 baht charge on my account in two places I never have visited in my total Thailand time. I called the bank, they sent me a fax to fill in and return and two months later, the charge was removed. They did tell me it would take 66 days to verify. What they did to investigate, I don't know but they did ask me where the last place I used it and it was the Jet and Jiffy gas station at kilo 25 on the Bangna Trat highway. But in the end, the charge was removed and everything was back to normal. I also made a point to notify the bank location that issued the card which may have helped.

I imagine it may be due to the bank that may or may not do anything but the Bank of Ayudhya did good by me. It just takes time and patience.

[jfchandler]

There may be a better situation on fraud re credit cards, because the cards are part of the VISA network, which has its own network fraud provisions...

But I'm pretty clear, you won't get that same kind of protection for Thai bank issued debit cards, even if they're VISA logo...

If anyone knows different on that score, please chime in...

[toptuan]

TT, in my years of living here, I've never had a Thai merchant try to pass on an extra charge to me, 3-5% or whatever, if I was trying to pay with a credit card.

I have had a lot of Thai merchants, mostly smaller, decline to take credit cards, or only accept them if the purchase amount is over 500 baht, or similar amounts like that...

JF, in my seven years of living here, I've never had a Thai merchant allow me to use a credit card without the 3-5% surcharge! (So I stopped trying to use it about three years ago).

What is the difference? Regional? Things changing over time? Should I give it a try again, after a 3-year hiatus?

[wichianburi1]

Bank services in general should be improved; namely national inter-banking. I tried to transfer a larger amount of funds from one bank to a different bank, though, was told this could not be done. Had to withdraw the lot in cash, walk over the road to the other bank and deposit the same there. Not really an appropriate banking method in the 21. century.

[tenhoursaway]

Thai banks are really far behind..., not only regarding fee structure.

I still keep a bank account in Germany (even I live and work in Thailand).

Fee structure & services (just to mention some) on that current account:

- Visa Card - Free

- EC card (= debit card) - Free

- Worldwide cash withdrawal with Visa card  - Free  (The bank even offers to reimburse the 150THB fee charged by Thai banks)

- Wired bank transfer  (incl. Interbank Transfer) - Free

- S.W.I.F.T /BIC  fee while choosing "OUR"

  (much less then what the Thai Bank charges !!additionally!! -  if I transfer money into my FCE account here.)

- Bariier free and highly secure (HBCI + nearly all browser types supported) Internet Banking.

  (I know just one Thai Bank that supports other (more secure) web browser then Internet Explorer.

    HBCI  - no idea if that system will ever be introduced in Thailand.)

Edited March 2, 2010 by tenhoursaway

[mahtin]

HBCI - no idea if that system will ever be introduced in Thailand.)

Unlikely as only the Germans use it afaik

[ThaiFelix]

To be honest the banking fees in Thailand are pretty low at least compared to Holland and the US. The only 2 real strange fees are the 150baht foreign atm card fee and the 600 baht incoming foreign T/T fee.

Well there is a very nice cash flow market there to be milked. Don't worry these fees will not go over looked and I am sure these fees will double

I dont mind paying service charges so long as the service I get is reasonable...been here 5 years, got a/cs at 3 banks, and they havn't yet deserved 1 satang of what I've paid.

[BSJ]

I like cash. dam_n governments can track your buying habits, and your location, with credit cards.