Vietnam moves towards cashless society

11:30 | 04/03/2022 Economy

HANOI— An ecosystem for cashless payment is essential for Vietnam to encourage people to switch from cards to contactless and digital payment, an important factor in the country’s digital transformation.

The COVID-19 pandemic has seriously affected the economy and changed the way we pay, with people forgoing cash in favour of contactless payment.

National Payment Corporation of Vietnam statistics show that around 1.86 billion cashless payment transactions worth VND23.6 quadrillion were made in 2021, rising by 169 per cent and 164 percent, respectively, compared to 2020 and 2019.

Thu Hien, from Go Vap District, Ho Chi Minh City, said online shopping and payment were becoming more popular and convenient.

Hien said previously she had to go to her children’s schools to pay for their tuition, but the schools now accepted bank transfers and even e-wallet payments.

According to Nguyen Anh Đuc, general director of Saigon Co.op, the supermarket chain saw the percentage of customers making cashless payments increase from 4 to 40 percent during the pandemic.

Saigon Co.op’s survey showed that around 32 percent of consumers were in favour of cashless payments, and 17 percent said they would make more cashless payments in the future.

vietnam moves towards cashless society
A person uses a smartphone to make a money transfer. The COVID-19 pandemic is providing a significant opportunity for accelerating cashless payment in Vietnam — Photo: VNA/VNS

Although there were positive results in cashless payment since the pandemic, Vietnam still faces difficulties expanding cashless payment as cash habits still dominate, and people are worried about security.

Thuy Trang, owner of a fruit store in Tan Phu District, said more than 95 percent of orders at her store when strict social distancing measures were in place were cashless. However, she said there was a drop in cashless payment since the city returned to normal.

According to Can Van Luc, a senior expert of the Bank for Investment and Development of Vietnam, Vietnam is among countries with a rapid increase in electronic payment in the region.

However, attention must be paid to speeding up the development of information technology and telecoms infrastructure, national databases and data-sharing to promote cashless payment.

Banks, financial technology, e-wallets, and telecoms were racing to build non-cash payment ecosystems to encourage consumers to forgo cash and switch to contactless and payment.

Late last year, the State Bank of Vietnam gave the nod to two telecom operators, MobiFone and Vinaphone, to pilot Mobile Money, which allows payments of small sums via telecom accounts.

In early December, telecom operator Viettel introduced the digital financial ecosystem Viettel Money, which was expected to accelerate cashless payment in Vietnam.

Financial expert Nguyen Tri Hieu said that Mobile Money would help more people in remote areas without bank accounts to make cashless payments with greater convenience.

According to Deputy Minister of Information and Communications Pham Đuc Long, about 50 percent of the population do not have bank accounts and most use cash for payments worth less than VND100,000.

Mobile Money will help expand cashless payment to most people, especially rural, mountainous and remote areas where banking and e-wallets services are not popular.

The project on the development of cashless payments in Vietnam for 2021-25 is creating a crucial legal framework for the development of the cashless payment ecosystem.

Governor of the State Bank of Vietnam Nguyen Thi Hong said that the central bank would improve the legal framework on cashless payment and fintech sandboxes to promote cashless payment.

In addition, the infrastructure will be improved to enable linkage between banks and payment intermediaries with goods and services providers ensuring instant processing and round-the-clock operation.

Source: VNS