Vietnamese cashing in on cashless payments

Economic inclusion

Deputy Prime Minister Vuong Dinh Hue said digital technology solutions have helped many countries in the world achieve a breakthrough in promoting financial inclusion. “Digital technology helps remove spatial, time and geographic barriers, allowing credit institutions to offer products and services at a lower cost, and facilitating consumer access,” he said, speaking at the Vietnam Electronic Payment Forum 2017 held in Hanoi on November 6.

Hue said the application of information technology and telecommunications with many new products has shown the potential and trend in developing modern banking services. He stressed on the need for all ministries, sectors and agencies concerned to solve difficulties in electronic payments and mobile payments aimed at popularizing non-cash payments in Vietnam.

According to the Payment Department under the State Bank of Vietnam (SBV), 41 commercial banks nationwide offer mobile payment services and their transaction value has been increasing strongly. In the first nine months of this year, there were 90 million mobile payment transactions worth VND423 trillion, an increase of 93 percent and 139 percent, respectively, over 2016 figures.

Some banks have effectively implemented mobile payment services for electricity, water, telephone, telecom and cable television bills, premium and some other fees. In addition, the SBV has also considered and approved 25 non-bank organizations as payment services providers.

According to the SBV, the development of mobile payment in Vietnam will contribute to promoting non-cash transactions and meeting the increasing demand of customers, especially those in rural, remote areas. This will expand customers’ abilities to access modern banking products and services, which will help improve banks’ business efficiency and governance capacity of credit institutions.

Completing legal framework

Deputy Prime Minister Vuong Dinh Hue predicted that Vietnam would soon see an explosion in mobile payment, adding that the government supported and was strongly committed to creating favorable conditions for mobile payment development. This would help, in part, to reach the target of reducing cash transactions to below 10 percent by 2020, he said.

Can Van Luc, a financial expert, said mobile payment solutions in Vietnam are booming. However, the habit of paying by cash and the emergence of many mobile payment solutions are obstacles for the overall development of the market.

Vietinbank Deputy General Director Tran Cong Quynh Lan said it is necessary to study and introduce a unified standard in terms of QR code format in mobile payment in the Vietnamese market.

SBV Deputy Governor Nguyen Kim Anh said the central bank will soon complete a legal framework and promote the application of advanced technologies in banking operations in general and payment activities in particular in order to build and develop a fully digital banking system.