Speaking at the Vietnam Retail Banking Forum 2019, jointly held by International Data Group Vietnam (IDG) and Vietnam Banking Association on November 28th in HCM City, general director of IDG Vietnam & Asean Le Thanh Tam said that the ratio of cash payment in Vietnam is still high at up to 79%, while the ratio of non-cash payment is only 21%.
At the same time, in non-cash payment, card payment accounts for a very high proportion, and the proportions of other payment forms such as QR codes and e-wallets are still low.
This situation is because the financial and technical infrastructure system is mainly concentrated in large centers and cities and not yet reaching out to difficult and backward areas.
The rate of borrowing through formal financial institutions is relatively high but there are still many forms of informal borrowing, while digital finance has not yet developed and the number of people using digital financial services remains low.
The number of Fintech companies in Vietnam are high, but they only focus on consumer payment, not yet covering all types of payment and other high-end services. The Internet has contributed to promoting the development of payment solutions in Vietnam, but the use of accounts for payment is still low, most transactions were paid in cash.
Meanwhile, regarding payment activities, the SBV’s statistics showed that the number of people having a bank account is currently 45.8 million people out of 92.6 million people, accounting for 63 percent of the population.
By the end of September 2019, Vietnam had 32 non-bank organisations licensed to provide payment intermediary services. Most of them provide e-wallet services, electronic payment gateways, collecting-paying services, and electronic money transfer.
In addition to fintech companies, 24 banks also provide QR code payment services with 50,000 QR code acceptance points. Moreover, there are 76 organisations offering Internet payment services and 44 organisations providing mobile payment services.
The total number of transactions in the first six months of 2019 via Internet channel reached 204.22 million, up by 60.64 percent over the same period of last year. The transaction value was 9.506 trillion dong, up by 18.5 percent over the same period of last year. The total number of transactions made via mobile phones reached 169.86 million, up by 109.48 percent over the same period of 2018; while the mobile transaction value was 1.761 trillion dong, up by 160.5 percent over the same period of 2018.
However, in general the ratio of non-cash payment transactions on total retail sales remains low, and the development of non-cash payment activities itself is limited.
Thus, Chair of MOCA Technology and Services Joint Stock Company Tran Thanh Nam said that changing Vietnamese cash-using habits is also a top priority in promoting non-cash payment orientation in Vietnam.
Nevertheless, this requirement is also a huge challenge and cannot be done in just a few days by a single business. It requires businesses operating in the field of mobile payment to make continuous investment and innovation to propagate benefits and encourage people, payment acceptance units and commercial businesses to choose more non-cash payment.
Meanwhile, according to Nam A Commercial Joint Stock Bank (NamABank)’s deputy general director Hoang Viet Cuong, digital banking channel will help customers increase their experience in non-cash payment activities without going to the counter.
This trend is becoming more and more popular as customers are increasingly busy and the demand for online and electronic payment is seen throughout the day, not only working hours as before. One of the key points given by NamABank’s leader is that the bank will bring robots into transaction points in the near future to enhance customer experience.
However, in order to successfully deploy digital banking, banks are still waiting for a clear legal basis from the SBV. According to Cuong, the management authority should soon issue legal documents that allow banks to deploy electronic-know your customer (eKYC) and the model of banking agent to widely serve customers.
Banking and financial expert Dr Can Van Luc said that recent surveys showed that customers of fintech companies have changed significantly in the last five years although payment services account for more than 70%. The payment service market share of fintech companies is also in a fierce competition with traditional banks.
The pressure to compete for retaining market share puts commercial banks in an issue of having to change, in which digital transformation is a solution chosen by many banks to create competitiveness and increase customer experience.
However, the biggest challenge is network security management and information security. “From the beginning of the year until now, Vietnam has about 1,400 cyber security attacks, up by more than 100 percent compared to last year. Meanwhile, only about 25-30 percent of businesses knew that they were at risk of being attacked. Therefore, it shows that the investment in network security management is still limited,” said Dr Luc.
