In addition to using local swipe cards, international cards and payment by QR codes, contactless payments by waving, tapping on the POS machine for payment, was gradually becoming the trend of available payment without cash used by many people.
Potential market
Currently, consumers, retailers and financial institutions in Vietnam were beginning to receive contactless payments due to their speed, convenience and high security. Contactless payment technology helped cardholders save time, place it near, glide or lightly wave the card on the POS machine to pay, no need to swipe the card, enter the PIN as the traditional way. For payments of more than 400,000 dong, the new cardholder must sign the invoice.
According to Visa’s survey of Vietnamese consumers’ payment attitude in 2018, 85 percent of surveyed people knew about contactless payment methods, of which 32 percent were using contactless payment technologies contact. Also, 86 percent of consumers made more contactless payments than two years ago.
Contactless payment technology started to develop in the last two years, when many banks such as Joint Stock Commercial Bank for Foreign Trade of Vietnam (Vietcombank), Sai Gon Thuong Tin Commercial Joint Stock Bank (Sacombank), Vietnam Technological and Commercial Joint-Stock Bank (Techcombank), and so on, simultaneously issued contactless cards. Sacombank cooperated with Visa, MasterCard and Japan Credit Bureau (JCB) card organisations to carry out contactless payment technology on many international card lines. Vietcombank also implemented this technology for all card issuers issued by banks, including international Visa, MasterCard, American Express, JCB, UnionPay and Napas domestic cards.
So far, many businesses had put contactless technology into payment operations, including small and micro enterprises, individual business households due to low cost, simplicity, better service to consumers. Typically in supermarkets, convenience stores, restaurants, cafes, resorts, entertainment areas equipped with contactless payment acceptance system.
At the same time, Vietnamese were becoming more aware of the benefits, security and convenience that this technology brought in daily transactions. Experts said that contactless payments would explode soon because Vietnam had a young population, adapt quickly to technology, and in particular, more than half of Vietnam’s population had used smartphones. These were positive signals for the growth and potential market of contactless payment technology in Vietnam.
Visa pioneered a trend
As a global payment technology company, Visa has been striving to promote contactless payments, contributing to making this technology a new trend in the Vietnamese market. Visa, contactless payment technology, can be applied to credit, debit, prepaid cards, and can be used on both phones and smartwatches.
To make a payment, customers need to touch or place the card in front of the POS or mPOS machine to accept wireless payments from four centimeters in any direction. The processing time was less than 0.5 seconds, ensuring security, quickly compared to giving the card to employees scanning stores.
In Vietnam, consumers were gradually turning to Visa contactless payment cards because this technology helped cardholders to transact faster and more securely. Besides, this new technology also allowed merchants to accept card payments to increase business productivity and reduce cash handling. Fast transactions meant customers reduce the time to queue and reduce the chance of missing revenue.
Currently, many countries had begun to carry out Visa’s contactless payment technology vigorously. In the United States, for example, an average of 78 of the 100 points that accept Visa payments allowed contactless payments. With the increasingly improved payment infrastructure, Visa expected to issue 100 million contactless cards to US consumers by the end of 2019. Canada recorded 70 percent of domestic transactions with a value of less than $50 made by contactless payment. According to Visa data, in Southeast Asia, Malaysia also recorded the development of contactless payment technology with more than four million payments per month in 2018.
In Vietnam, Visa contactless payment technology was accepted by many payment units across the country. Retailers such as Saigon Co-op, Lotte Mart, eMart, Aeon Citimart, CGV cinema chains, BHD, Starbucks chains, The Coffee House, KFC, and so on, also fully implemented the payment technology exposure to incentive programmes.
Visa had been implementing EMV (Europay, MasterCard, and Visa) chip card technology in Vietnam for a long time since 2010. Since October 2018, all Visa cards issued in Vietnam had been equipped with EMV Contactless Chip technology. To accelerate cashless payments, Visa launched Vietnam Payment Security Roadmap in March 2019, focusing on groundbreaking initiatives and supporting the development of payment security to meet the rate at which technology was changing consumer payment behavior. Also, the company was expanding its network of accepting cards to bring benefit and best experience to consumers.
Contactless payment technology was still in the early stages to penetrate modern payment methods in Vietnam, after e-wallets and payment via QR codes. This showed that contactless payment was more likely to explode in the future, especially when the user reception of contactless cards was very positive.
