Phouphet Kyophilavong: This paper analyzes price regulation in the case of the electronic interbank credit transfer service in Thailand where the Bank of Thailand (BoT) sets the maximum rates that a commercial bank may charge its customers. This paper finds that there is no price competition in either the bulk or retail interbank payment services. Commercial banks admitted that electronic payment fees were high compared with the costs. To move toward a fully electronic-based payment system, a major rebalancing of current banking fees is necessary.
In addition, the author also recommends that to spur price competition in the market, the following steps are important: (1) pricing should be made more transparent for consumers; (2) it is of utmost importance that the BoT recognize that price ceilings serve to protect the interest of the banks rather than those of consumers; (3) in the medium term, the ceiling rates imposed on receiving...