The dream of a non-cash Vietnamese economy by the government and many people is gradually coming into reality.
Credit cards, e-wallets, code scanning by mobile phones, etc. are becoming more and more familiar to Vietnamese users. Non-cash means of payment are being implemented by many businesses, especially in big cities.
Weekly shopping in supermarket, monthly electricity and water bill payment, eating with the whole family on weekend, etc., almost all services are paid by bank credit cards or mobile banking by Thu Dung, an office worker in District 3, HCM City. Even more recently, Dung used the service to buy movie tickets, registered to buy air tickets, hunt discount sales on Tiki.vn, etc. simply because it links to the e-wallet and also has promotions.
“Over the past few months, I rarely to go ATM to withdraw cash because all the big expenses for myself and my families are paid by card, or via e-wallet. Even, going by taxi can be done through a card or an e-wallet. Everything I buy at supermarket or convenience store uses cards or e-wallets. Occasionally, I need to some cash to spend such as on gasoline, car keeping service”, Thu Dung shared.
In spite of not being as “stylish” as Thu Dung, Tran Trung, a parent in District 7 also said recently, all tuition fees for his two children are made through account transfer instead of having to go to school to submit in cash as before. Even, Trung said that once he went to a Mobile World store, he could immediately pay for electricity, water and cable TV bills.
According to Trung, payment services are now quite convenient, not losing as much time to travel as before. Besides, the strong development of electronic technology by the banking system through the issuance of ATM cards, credit cards, co-branded cards… or POS machines, financial technology companies (Fintech) with the popular service of e-wallet has rapidly popularised non-cash payment applications to many people.
For example, by the end of 2017, Payoo e-wallet linked with more than 6,000 locations across the country, including convenience stores, supermarkets, electronics stores, and directly connected with 30 banks, helping customers pay more than 200 different utility bills. Payoo continues to expand its partnership with systems to increase coverage for PayTouchan integrated system that sells airplane tickets, movie tickets… at convenience storesto provide customers one more convenient and easier channel to buy tickets. With a large and frequent number of users, the total transaction value via Payoo is nearly $2 billion per year. One of Payoo’s lasting milestones in 2017 is the implementation of public administrative services at Level 4.
Or, the MoMo wallet in the past year has also officially become Uber’s first US e-wallet partner in Southeast Asia; linking the 12 largest banks with electronic wallets. MoMo currently has eight million users, of which about 65 percent subscribes to use e-wallet application on the phone and 35 percent uses the service at transaction points.
According to Le Huy Toan, general director of general Department, Mobile World Investment Joint Stock Company, currently, supermarkets in this system serves the payment for such services as electricity, internet, cable television, instalments, post-paid mobile phones of MobiFone and Viettel, fixed-line telephone, repayment of instalment loans at financial companies. The number of participants in this service at stores is about four million people per month.
“The general assessment of the customers is that they feel very satisfied, interesting about the utility services that Mobile World brings about. The evidence is that the collection is increasing and the numbers of customers coming back after the first time are quite many. The decisive factor in this service is that retailers must have the ability to connect a wide range of services for customers and have a wide range of stores and must handle those services in the simplest and quickest way”, added Le Huy Toan.
One of the first factors promoting non-cash payment is the growing e-commerce service in Vietnam.
Analysis of Kantar Worldpanel Vietnam shows that the Internet accessibility in Vietnam is increasing strongly. In Vietnam, mobile broadband internet has 53.411 million subscribers. In particular, fixed broadband subscribers reached 9.57 million, accounting for 18 percent. The strong development of digital content services will create favourable conditions for businesses and consumers to form habit of using the Internet for different purposes such as marketing, shopping, payment…
According to Ngo Trung Linh, general director of the Vietnamese Community Company, most users in Vietnam have their first online experience through smart phones. Even, young people also own at least two mobile devices each. Therefore, this is extremely favourable conditions for online businesses, online payment and mobile application development in Vietnam market.
Besides, timely actions by the government such as the issuance of a non-cash payment strategy up to 2020, the formal licensing of e-wallet services, the establishment of Fintech Steering Committee, etc., helped the Fintech sector to grow dramatically over the past year. Previously, the payment by POS card was a major turning point in the field of electronic payment, but in the near future, the trend of payment by QR Code on mobile phone will be the main trend. Users only need to manipulate QR Code on the phone to pay bills or purchase anywhere. The trend of payment by QR Code, in spite of not yet being popular in Vietnam, has begun to develop.
Most recently, the Viettel Group has piloted internally and employees can pay despite drinking tea or buying candy at street stalls via cell phones without having to carry a purse. QR Code technology is considered to significantly reduce the cost of payment infrastructure development, so it will quickly grow strongly.
A food business in HCM City also said that the company will not be able to stand outside this trend. Thus, in current transactions, the non-cash payment ratio has accounted for more than half. This reduces relevant costs as well as be safer than “carrying the whole bags of money to transact”.
In fact, the trend of cash payment is declining. According to the State Bank of Vietnam (SBV), the proportion of cash/total money supply in the economy tended to decrease from 19.02 percent in 2005 to 14.02 percent in 2010 and 11.45 percent in August 2017. Accordingly, the awareness and habit of using cash in payment has had positive changes in the direction that more and more people choose electronic payment instead of cash payment. In particular, bank cards continue to grow, the number of cards issued, the number and value of card transactions continue to grow steadily. As of September, 2017, the cumulative number of issued cards reached over 127 million units (up 5.5 million cards compared to the end of June 2017).
On the other hand, the number of ATMs amounted to 17,396 units while POS machines reached 260,187 units. The transaction volume increased with the total value via ATM amounting to 528.985 trillion dong (an increase of 24 trillion dong compared to the end of June 2017) and via other equipment amounting to 84.099 trillion dong.
Under the scheme on development of non-cash payment in Vietnam, by the end of 2020, the proportion of cash on total money supply will be lower than 10 percent. The entire market has at least 300,000 POS installed with over 200 million transactions per year; 100 percent of supermarkets, shopping centres and modern distribution facilities also have POS; 100 percent of the State Treasury of provinces and cities directly under the Central government; State Treasuries in districts, cities and towns under the provinces and centrally-run cities also have POSs to serve the collection of state budget.
Many economists also said that the non-cash payment trend in Vietnam will develop more strongly in the future. Since then, it not only helps reduce the cost to the economy, but also lessens the cost of businesses, strengthening the connection with domestic and foreign users. Consumers themselves will have more convenience in making payment, and purchasing goods daily.
