Local money changers have been told to improve their operations in preparation for a tougher battle once the Asean Economic Community (AEC) takes effect next year, says the Thai Association of Foreign Exchange (Tafex).
President Chanaporn Poonsuphirun said signs of stronger competition have appeared, with some foreign money changers applying for foreign exchange operating licences from the Bank of Thailand. The AEC’s scheduled launch in late December 2015 is a key factor attracting foreigners to enter the financial business in Thailand.
Ms Chanaporn said businesses must raise their operations to international standards to build confidence with local and foreign customers. In addition, Tafex wants all operators to join the association and gain access to updated regulations and business information. The expansion of big players, especially in provincial markets, is another possibility in the run-up to the AEC.
Roughly 1,300 money changers, mostly operating through hotels and travel
agents, have a business licence from the Bank of Thailand. Just 75 are Tafex members, although that figure is up from 40 in 2013. “There are many money changers operating without a legal licence issued by the central bank, which is delaying the progress of developing the business,” Ms Chanaporn said.
Tafex anticipates forex trading volume through the local system of US$10 billion in 2014, up from $6.6 billion last year, despite the country’s sluggish economy and lower-than-expected tourist arrivals.
Ms Chanaporn, also the managing director of Twelve Victory Exchange, one of the country’s biggest money changers, said her company plans to expand upcountry through joint ventures with provincial small businesses. Twelve Victory now has 20 branches, all in Bangkok.
The central bank, meanwhile, is studying a regulation for branch expansion of money changers. Tentatively it would require minimum registered capital of 10 million baht before a money changer could add more branches.