Thailand kicks off $13B stimulus handout via digital wallets

Thailand has launched the first stage of its digital wallet scheme that will provide millions of citizens with free money, but the stimulus package has generated controversy.

The digital wallet stimulus is aimed at bolstering Thailand’s GDP as 45 million citizens will spend locally and help to grow the country’s economy, which has lagged compared to its Southeast Asian neighbors.

The 450 billion baht (US$13.4 billion) scheme was introduced by Thailand’s former prime minister Srettha Thavisin, but he was dismissed by the country’s constitutional court in August for an ethical violation. A pillar of Thavisin’s election campaign, the digital wallet scheme would see the government hand out a one-time payment of 10,000 baht ($299) to eligible citizens.

Following Thavisin’s dismissal, Paetongtarn Shinawatra was chosen to succeed, becoming Thailand’s youngest-ever prime minister aged 38. She is the third member of her family to assume the kingdom’s highest public office, following her father Thaksin and aunt Yingluck. But it was initially unclear whether Paetongtarn would continue the widely touted digital wallet scheme begun by her predecessor.

Despite delays and errors with the application system, millions of Thais have registered to receive the handout. But the digital wallet suffered a blow when Shinawatra announced earlier last month that part of the 450 billion baht handout will be distributed in cash.

The first stage of the handout began a couple of weeks ago as local outlet Pattaya Mail reported crowds forming to register for the digital wallet handout. First to receive the money are state-welfare cardholders and those receiving disability allowances, who together number around 14.3 million individuals. According to Thai PBS, more than 100 million baht has already been distributed to 12.19 million people.

Registration for the digital wallet was conducted via the “Thang Rath” app — a government app – which has faced some problems, such as users having to make several attempts for the face biometrics matching process to confirm their identities.

However, groups eligible for the first phase of the scheme were not required to register via the app but had to link their PromptPay accounts (a mobile banking app) to their citizen ID in order to receive funds directly into their bank accounts. It’s been reported that many immediately withdrew the full 10,000 baht in cash, after receiving the payment, leading to a surge in bank visits and withdrawals across the country.

The kingdom is currently in consultation to begin the second phase of handouts, which would see another 26 million digital wallet registrants receiving 10,000 baht.

When launching the first phase of the scheme, in a ceremony in Bangkok late last month, Shinawatra explained that the digital wallet system would form a digital infrastructure for Thailand by creating a digital ID for citizens to link to government agencies, The Nation reports. Previously, businesses such as retail stores, grocery stores, and food shops were encouraged to sign-up to the digital wallet scheme.

The 450 billion baht scheme has faced criticism as economists and opposition parties have questioned the long-term impact of the stimulus. Deutsche Welle reported a senior member of Thailand’s People Party describing the stimulus package as an ineffective measure and that the cash handouts are not the same thing as the digital wallet that was pledged.

“It’s not quite a very effective way to stimulate the economy in the first place,” she said at an event at the Foreign Correspondents Club of Thailand last Thursday. “The government has run out of options for the people.”

“If we continue to do this, it will put a fiscal burden on the country and the economy,” she added.

However, others, such as Thitinan Pongsudhirak, a political scientist, have said Thailand has to look towards digitization to capitalize on economic growth. “Now I think the dial has moved on, they have to be talking about much more digitalization, digital economy, AI, machine learning, education reform,” he told the Foreign Correspondents Club of Thailand in August.

“Thailand has missed the semiconductor innovation, the tech boom and now it is missing the AI burst, and the reason is because of the domestic political situation. I think Thailand has been held back,” he added.

Article Topics

digital government  |  digital ID  |  digital wallets  |  financial inclusion  |  ThaID  |  Thailand