14:35 | 18/06/2019 Finance - Banking
(VEN) - The Vietnamese e-commerce market has increased to US$8 billion, but only three to five percent of total transactions are non-cash payments. The biggest problem is attributed to consumer habits and trust.
Vietnam’s e-commerce is among the fastest growing regionally, at 25-30 percent per year. According to the Vietnam E-commerce Association, more than 60,000 orders per day are traded on the four largest e-commerce floors in Vietnam. However, cash remains the main payment method for online shopping in Vietnam.
Nguyen Thi Minh Huyen, deputy director of the Vietnam E-commerce and Digital Economy Agency under the Ministry of Industry and Trade, said only three to five percent of total transactions are non-cash payments, with online payments accounting for a very low proportion. As many as 80 percent of customers still use cash-on-delivery (COD) payment for products they order online.
According to statistics compiled by the World Bank, the number of non-cash transactions per capita is 26.1 percent in China, 59.7 percent in Thailand and 89 percent in Malaysia. Pham Tien Dung, director of the Payment Department under the State Bank of Vietnam (SBV), said that while consumers in the world seek convenient and modern payment methods, Vietnamese people still have a very strong preference for cash.
Pham Tien Dung attributed this to the lack of trust between customers and sellers. Most Vietnamese people are worried about the quality of products purchased online, making them hesitate about paying online. The many fake websites providing false information about goods and services do not help foster such necessary confidence.
Dao Minh Tuan, deputy general director of the Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank), said many businesses are reluctant to accept new payment methods, while there is a shortage of mechanisms and policies to encourage non-cash payments.
According to Nguyen Thi Minh Huyen, the government should provide legal corridors and institutions to build consumer trust in e-commerce in order to promote non-cash payments.
In addition to changing consumer habits and promoting online payment channels, the state needs to invest in infrastructure, become the largest buyer (government procurement through online bidding), and provide fee-based online public services.
The Vietnam E-commerce and Digital Economy Agency will consider revising a decree to create a legal corridor for e-
commerce development, strengthen collaboration in the fight against counterfeit goods and intellectual property rights
violations, and develop an overall e-commerce program by 2025 and submit to the government for approval.