Vietnam’s cashless payment trend is coming — mobile payments grow rapidly

Vietnam has nearly 18,300 atms and more than 289,000 POS machines, as many as 76 Banks offer online banking services, 44 Banks offer mobile payment services and there are 24 e-wallet providers, according to the central bank.

By the end of the third quarter of 2018, Vietnam’s trading volume and transaction volume through ATM increased by 12% and 16%, respectively, compared with the end of 2017. Payment rates via POS also reached 42% and 29%, respectively. 

Vietnam’s interbank electronic payment system processed 37 million transactions worth nearly $898.4 billion in the first quarter of 2019, up 23% and 17.8% from 2018, according to Vietnam’s National Bank of Vietnam.

The central bank’s payments department says non-cash payments are becoming a new trend in Vietnam and the use of cash is declining.

In Vietnam, especially in the big cities, there is a clear trend of not using cash for consumption.

Photo credit:pixabay

Electronic payment via Internet and mobile phone is becoming more and more popular among consumers, because it is very convenient, time saving, low cost and high security.

Meanwhile, Vietnam’s credit institutions are diversifying their products and implementing with enterprises and related units that do not use cash in public payments. This is one of the inevitable trends in financial markets.

In metropolitan areas, young Vietnamese can easily buy foreign goods and pay, and they don’t have to be specifically commissioned to bring them back from other countries, the Voice of Vietnam reported.

Vietnamese consumers can easily select items through e-commerce sites and pay with international credit cards when discounting various brands on promotion day.

More and more people are using the Internet and mobile phones to pay for shopping in Vietnam. Young consumers use electronic wallets to pay for everything from taxis and shopping to coffee and electricity.

At present, for example, Vietnam Online Mobile Has more than 12 million e-wallet users, 10,000 partners and more than 100,000 receiving points. In order to increase the number of users, Vietnam Online Mobile AG has partnered with banks to create more payment points, allowing users to pay when they are connected and off-line, and all payment services can meet the basic needs of users.

Banks in Vietnam are also offering refunds, or free first-year trial credit cards and other benefits, and some even partnered with shops, hotels and travel agencies to cut prices, with credit card payment services up to 50% off.

In a common trend, Vietnamese Banks are also vying for market share. In Vietnam’s VP Bank, in addition to expanding the number of card holders, the bank also offers a variety of cards to enterprise. “In fact, for enterprises, cash management costs currently account for 4.7 to 15 percent of their operating costs, while manual processing for ordering or purchasing accounts for 92 percent, which is about 5 percent,” said lai shi-yan-fang, senior manager of small and medium-sized enterprise department at VP Bank of Vietnam. Based on the analysis of business needs, difficulties and challenges, we provide a set of solutions to help buyers delay payment as long as possible and sellers collect payment as soon as possible.

According to statistics, last year, Vietnam’s interbank electronic payment system securely handled transactions amounted to 7300 trillion dong, an increase of 25% compared with 2017, and mobile payments increased by 169.5% compared with 2017.

Vietnam was the fastest-growing market for mobile electronic payments in 2018, with the percentage of consumers using mobile payments increasing from 37 percent to 61 percent, according to a survey conducted in 27 countries by pricewaterhousecoopers international LTD. In addition to the current electronic payments for electricity and water, non-cash payments will continue to increase if public services such as health care and education are also paid electronically without cash.

The government of Viet nam has also encouraged residents to receive and use financial banking services by promoting economic transparency and providing incentives for the use of electronic payments.

Promoting electronic payment to non-cash society is an inevitable development trend under the background of the fourth industrial revolution. It has a dual effect, promoting economic growth while facilitating the implementation of comprehensive financial strategy, which is one of the important measures to apply information technology in commercial banking services.

Experts believe that encouraging non-cash payments is the foundation for Vietnam’s establishment of e-government, and that as Vietnam integrates deeper into the world economy, the Foundation for Modern Fintech can help Vietnam’s banking and financial sectors participate in global value chains and bring breakthroughs to Vietnam’s development.