Thailand’s New KYC Regulations for E-Money Services: A Stepped-Up Fight Against Money Laundering and Fraud

The Bank of Thailand (BoT) has recently issued a notification introducing stricter Know Your Customer (KYC) regulations for e-Money service providers. This move comes in response to the growing popularity of e-Money services and the increasing risks associated with their activation.

Rationale

E-Money services have become increasingly popular due to their convenience for making payments and transferring funds. However, with various forms of e-Money businesses, varying risk levels, and diverse online channels, customer verification processes among service providers have proven insufficient. This can lead to potential money laundering and fraud risks. To address these concerns, the BoT requires e-Money service providers to establish proper KYC processes to ensure customer identification and verification.

Statutory Power

The BoT derives its power to establish these regulations from Section 24 of the Payment System Act B.E. 2560 (2017).

Scope of Application

These KYC regulations apply to all e-Money service providers under BoT’s supervision.

Key Definitions

• Business provider: E-Money licensees or registered entities.
• Customer: Natural or legal persons, or a person with a legal agreement.
• Person with a legal agreement: An intermediary possessing, utilizing, disposing, or managing assets on behalf of others.

Registration and Verification

e-Money service providers must implement a two-step process:

1. Customer Identification: Obtaining accurate customer information and evidence.
2. Customer Verification: Confirming the authenticity and validity of the information and evidence, ensuring the customer is the true owner.

Degree of Verification

The level of customer verification depends on the type of e-Money service and activation channel:

• Domestic transactions: Service providers must comply with anti-money laundering (AML) regulations.
• Transactions involving funds transfer or international payments: Additional verification measures are required, including face-to-face or non-face-to-face methods.

Digital ID Platform

Service providers can use digital ID platforms as an alternative to traditional verification methods, subject to approval from the Electronic Transactions Development Agency (ETDA) and compliance with relevant ICT standards.

Future Transactions and Changes

For returning customers, service providers can consider applying customer authentication methods to ensure continued accuracy and authenticity. These methods must be rigorous and consistent with the risk level and e-Money service type.

Risk Management and Internal Control Procedures

Service providers must have written policies and measures regarding KYC, internal control procedures, and data governance, all approved by boards or top management.

Penalties for Non-compliance

Businesses that fail to comply with the regulations face the possibility of suspension, fines, or other consequences. Those unable to comply within the stipulated time may apply for relaxation of the regulations or request BoT’s approval for alternative methods.

Effective Date

These regulations take effect after their publication in the Government Gazette.