The state-controlled Government Savings Bank (GSB) will follow in commercial banks' footsteps by scrapping online banking transaction fees, a move that it estimates will cost 300-400 million baht in forgone fee income.
No-fee services for digital channel transactions are expected to take effect next week after the proposition goes before GSB's board for approval on Monday, said president and chief executive Chatchai Payuhanaveechai.
The estimated forgone fee-based income represents 5% of GSB's total revenue, which is well below that for commercial banks, he said.
Four large banks -- Bangkok Bank (BBL), Siam Commercial Bank (SCB), Krungthai Bank (KTB) and KBank -- on Wednesday made a surprise push into digital banking by offering free transactions on their digital platforms. The banks are aiming to attract more customers and monitor their financial behaviour and data, which is crucial for banks in the fight against new players from platform giants like Alipay.
BBL, SCB and KBank permanently removed the fees for interbank and cross-clearing zone money transfers, bill payments and top-up services through the digital platform, while KTB is offering those services free of charge until year-end.
Smaller banks are jumping onto the fee-cut bandwagon. Thanachart Bank, for example, from April 1 will remove transaction fees for interbank fund transfers and bill payments for customers who use the services through the Thanachart Connect mobile app and Thanachart i-Net.
Kasikorn Research Center recently estimated that banks will lose 9 billion baht in forgone fee-based income for the rest of the year after digital banking transaction fees are waived.
Mr Chatchai said no-fee transactions for the digital channel have arrived three years earlier than forecast. Without scrapping digital transaction fees, banks are at risk of losing customers, he said.
GSB now has 2.3 million mobile app users, below KBank's 8 million and SCB's 6 million.
Mr Chatchai said the bank aims to raise the number of mobile app users to 2 million and merchants using the bank's QR payment platform to 100,000 this year.
The bank had 40.6 million accounts held by 22 million customers at the end of last year.
Asia Plus Securities said retail giants providing bill payment services, including CP All, Tesco Lotus and Berli Jucker Plc (which owns a 97.9% stake in Big C Supercenter Plc), will take a hit from the no-fee digital banking trend.
