Electronic Payment System and Thailand economy

Abstract

The purpose of this study is to investigate the changes in Thailand payment system according to the National e-payment master plan and to examine the effects of e-payment instruments on cash use using quarterly data from 2010 to 2018. The results found that some types of e-payment instruments (e.g., online payment (internet/ mobile banking) and debit cards) can lead to a decline in money circulation. The estimated coefficient of cash-online payment is -0.220, suggesting that a 1% increase in online payment transactions is associated with a 0.22% decrease in the demand for cash transactions. In addition, the estimated coefficient of cash-debit card is -0.057, indicating that a 1% increase in debit cards transactions is associated with a 0.057% decrease in the demand for cash transaction. Moreover, Gross Domestic Product (GDP) and interest rates play a significant role in determining the demand for cash transactions. However, withdrawal money via ATM can increase cash demand significantly as its estimated coefficient is 1.011.