15:29 | 05/01/2019 Finance - Banking
A recent government resolution on changing the business environment to improve competitiveness and labor productivity contains a push to accelerate use of cashless transactions.
|The government wants cashless transactions made viable for all household bill payments by the end of this year - Photo by AFP|
Provincial and municipal leaders have accordingly been tasked with instructing all schools and hospitals, as well as electricity, water, sanitation, telecommunications and postal companies in urban areas to coordinate with banks and intermediary payment service providers in collecting bills and fees via cashless transactions.
The government has recommended that establishments prioritize mobile payments and payment via card readers, and requested that the task be completed before December this year.
Vietnam Electricity, the national utility, has been asked to ensure power companies work with banks and intermediary payment service providers to collect electricity bills via cashless methods and promote the use of electronic and mobile payments. The target for the year is to double the number of customers using e-payments to pay their electricity bills.
The State Bank of Vietnam has been asked to come up with solutions that would promote the use of electronic wallets, wherein users can deposit cash into their e-wallets without the need for a bank account. The central bank has also been asked to find ways to remove imitations on e-transactions before the third quarter of this year.
The State Bank must also require commercial banks and intermediary payment service providers to implement the QR code standard, and work with the Ministry of Finance to come up with a list of types of transactions that have to be done through banks, as well as make amendments to existing regulations to promote cashless payments for real estate transactions.
According to the World Bank's statistics released last July, Vietnam was the country with the lowest percentage of cashless transactions in the region with only 4.9 percent, while this value for China and Thailand were 26.1 percent and 59.7 percent respectively.
While Vietnam rolled out an e-payment system for taxes in 2014 with 95 percent of companies registered, currently only 70 percent of tax money is collected via this method and many businesses still prefer paying their tax directly with cash.
Similarly, while Vietnam has had policies to encourage consumers to pay electricity bills through banks and intermediary payment service providers, currently only 4.5 million people, or 20 percent of electricity consumers, pay their bills through these channels.
The government's resolution does not include rural and remote areas as the majority of Vietnamese living in such areas still lack access to modern payment methods.