Thailand’s New KYC Regulations for E-Money Services: A Game-Changer for Businesses

August 31, 2020

The Bank of Thailand (BOT) introduced new Know Your Customer (KYC) guidelines for e-money businesses, marking a significant milestone in the evolution of Thailand’s regulatory regime for e-money services. The new regulations aim to provide a more nuanced approach to risk assessment and customer identification in the rapidly growing field of e-money services.

Effective Date and Supplementing AMLA

The new KYC regulations, as outlined in Notification Sor Nor Chor 1/2563 Re: Know Your Customer Regulations for Activating the Use of e-Money Services, became effective on May 6, 2020, and supplement the KYC requirements in the Anti-Money Laundering Act B.E. 2542 (1999) (AMLA).

Identification and Verification: Two Crucial Steps

The KYC processes for e-money service providers involve a two-stage process: identification and verification. The first stage, identification, involves determining the customer’s identity. The second stage, verification, confirms the accuracy and validity of the information received during the identification process.

Product-Specific Procedures

E-money service providers have been given product-specific KYC procedures outlined in the notification to allow them to tailor procedures to the level of risk associated with each offering. For non-transferable payments, services must adhere to the customer identification and verification procedures in the AMLA. However, for transferable payments, additional verification measures like face-to-face or non-face-to-face are required.

Verification Methods

Face-to-Face Verification

In cases where face-to-face verification is an option, e-money service providers must confirm the information’s accuracy, truth, and up-to-dateness from a reliable source, such as the National Credit Bureau. They must also prove that the information provided by the customer matches their identity. This can be done using a smart ID card and a smart card reader connected to a government electronic inspection system like National Digital ID.

Non-Face-to-Face Verification

When face-to-face verification is not an option, e-money providers must obtain a photograph of the customer and use advanced technology to compare the individual’s face with the biometric information embedded in their smart ID card. E-money payment or transfer services implementing measures to minimize risks in line with the AMLA’s criteria for low-risk services may confirm the identification from the information themselves.

Corporate Customers

For corporate customers, e-money service providers must identify and verify the corporate entity’s authorized person, in addition to following the AMLA’s KYC procedures for corporate customers. This includes collecting vital information about the company such as its name, objectives, and contact details.

Implementation and Compliance

All e-money services are expected to comply with the BOT’s KYC notification by November 2, 2020. Existing e-money services must submit a clear operating plan to the BOT by July 5, 2020, demonstrating how they will come into compliance with the regulations. Approval may be sought from the BOT for any additional KYC processes or technology to be implemented. Exemption requests from the regulations can be submitted to the BOT in writing or electronically.