According to The World Bank, the credit card ownership rate in Thailand is 22.61%, which is relatively low compared to Singapore (41.74%) and Japan (69.66%). Despite this, 95.6% of Thai people have accounts with formal financial institutions, as reported by KBank’s Financial Inclusion Report.

As a result, payment methods linked to bank accounts, rather than credit lines, remain popular across the region. Businesses in Thailand need to take this into account and offer alternative payment methods to cater to customers’ needs. Two popular methods are direct debit and mobile banking, both offering unique advantages depending on your business needs. In this post, we’ll explore how each payment method works and which one may be the right fit for your business.

What is Direct Debit Payment?

Direct debit allows customers to link their bank account to your website or application, enabling them to make seamless payments in the future. Once the bank account is securely connected to your platform, future transactions will be automatically deducted from a customer’s bank account without additional authorization from the customer.

How Does Direct Debit Payment Work?

Account Linking Flow

When customers choose direct debit as their payment method for the first time, they will start the process of linking their bank account to your platform. On mobile, they will be redirected to the bank’s application, where they can enter their account details and accept the terms and conditions. On desktop, the payment page will display a QR code that customers can scan with their mobile banking application on their mobile phone. From there, they can enter the account information, agree to the terms and conditions, and complete the linking process.

Payment Flow

Once linked, customers can make future payments without having to authorize again. This streamlined process simplifies recurring payments, subscriptions, or any payment scenarios requiring repeated transactions.

What is Mobile Banking Payment?

Mobile banking solution allows your customers to make payments via their banking application. With this option, customers authorize payments through their bank's mobile application rather than directly on your website or app.

How Does Mobile Banking Payment Work?

When customers choose mobile banking, they are redirected to their bank's app to complete the transaction. After selecting mobile banking as their preferred payment method, your platform initiates a deep link, opening the banking app installed on the customer’s phone. Customers then authorize the payment in the app to complete the process.

Direct Debit vs. Mobile Banking: What’s the Difference?

While both direct debit and mobile banking draw funds from a customer’s bank account, the process and use cases differ significantly. Here’s a comparison of the two:

Which Payment Method Is More Suitable for Your Business?

Choosing between direct debit and mobile banking depends on your business model and your customers’ payment habits. Direct debit is ideal for businesses that aim for repeated purchases or have a subscription model. It offers a frictionless experience, eliminating the need for frequent customer authorization, which can improve customer retention and make repeat transactions easier.

On the other hand, mobile banking is better suited for businesses with more one-time purchases. For example, a new clothing brand may face challenges convincing customers to link their bank account with a platform they’ve just discovered. Similarly, customers may be hesitant to link their accounts with platforms they plan to use infrequently. In such cases, mobile banking offers a convenient alternative, allowing customers to make payments without the commitment of account linking.

Ultimately, both payment methods come with their own advantages. The right choice depends on your business model and your customers’ preferences. Alternatively, you can offer both options to provide flexibility and ensure customers can choose the payment method that works best for them. Opn Payments offers solutions for both direct debit and mobile banking. Reach out to our team to learn how we can help you integrate these options seamlessly into your platform.