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July 14, 2023

Thailand Tightens Qualifications for Payment Service Operators

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The Bank of Thailand (BOT) has issued new notifications amending regulations for payment businesses that fall under the Payment Systems Act B.E. 2560 (2017) to promote transparency and good governance in the payment industry.

Notification No. SorKorChor 2/2566 (“Notification 2”) increases the required qualifications for applicants seeking a license to provide payment services designated as being under the BOT’s supervision, and Notification No. SorKorChor 4/2566 (“Notification 4”) stipulates additional duties and exemptions for certain types of business operators. The notifications were published in the Government Gazette on July 7, 2023, and came into effect the following day.

Additional Qualifications

Notification 2 expands the list of prohibited characteristics for business operators applying for a license or registration to engage in a designated payment service, and their directors. For example, applicants must not have been ordered to suspend or cease their operations, and their registration or license to engage in financial business or operate a designated payment system or service must not have been revoked. The notification defines “financial business” as including financial institutions, credit card business, personal loan business, securities business, and so on.
In addition, applicants’ directors and management must not have prohibited characteristics, such as being involved in the management of a financial business or designated payment system or service that was ordered to suspend or cease its operations. The applicable registration or license also must not have been revoked.

Reporting Requirements

During the application process, Notification 2 requires applicants to disclose information on shareholders and related parties (including spouses) who hold an aggregate 10 percent or more of the total paid-up shares. Notification 4 imposes this same reporting duty regarding shareholders and related parties but applies it to licensed operators in an ongoing manner. Existing payment service operators must make their first report of this information to the BOT by September 6, 2023.

Exemptions and Transition

Both Notification 2 and Notification 4 grant certain exemptions from compliance and reporting duties to some types of business operators, such as financial institutions, commercial banks, and nonbank business operators regulated under Declaration of the Revolutionary Council No. 58 of 1972.

Notification 4 also provides for a transitional period for currently licensed business operators. Directors or management with any prohibited characteristics can hold their position until January 4, 2024, by which time business operators must have appointed the necessary replacements.

For more information about these notifications from the BOT, or on any aspect of financial or payment business in Thailand, please contact Tilleke & Gibbins at [email protected], [email protected], or [email protected].

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