Banks and financial institutions should apply industry 4.0 technologies and find new solutions to handling risks from e-payments if they want to further develop their products and services in the local market, Nguyen Kim Anh, deputy Governor of the State Bank of Vietnam, has said.
Anh urged credit institutions to further optimise the use of smart data for making insightful analysis on customer needs so that they are able to provide clients with appropriate products and services.
2018 saw booming e-payment services in Vietnam as internet and mobile payment transactions respectively leaped by 19.5 per cent and 169.5 per cent 2017, the State Bank of Vietnam reported. Indeed, PricewaterhouseCoopers (PwC) ranked Vietnam as one of the fastest-growing mobile payment markets in 2018.
As many as 18,668 automated teller machines (ATMs) and 261,705 point of sale (POS) machines had been installed nationwide by the end of March. Transactions via domestic payment cards amounted to 65 million in amount and VND171 trillion (US$7.35 billion) in value during the first quarter of 2019.
Commercial banks have integrated additional features into bank cards with the aim of facilitating card holders’ payments and easing security threats.
These positive outcomes were attributed to concerted efforts by commercial banks into developing new payment methods based on the application of innovative apps and solutions such as QR codes, the digitisation of card information, contactless payments, and the use of smart phones as a payment tool. These applications have allowed banks to improve security and convenience for their products and services.
Nguyen Quang Minh, deputy general director of the National Payment Corporation of Vietnam (NAPAS) claimed changing local payment behaviour as well as leveraging the development of e-payment remains a thorny issue for commercial banks.
Minh elaborated that financial services and payment methods have merely been developed in major localities while banks are yet to find much traction in rural and remote areas.
Nguyen Thi Hien, deputy director of the Banking Strategy Institute, said that the country’s average financial service access rate remains lower than that of regional peers. Most notably, the rate of adults making e-payments stood at 23 per cent, much lower than the 67.9 per cent ratio in China and 79.8 per cent in Thailand.
Hien criticised the slow pace of e-payment growth for the long-standing cash payment behavior of locals and their fear of security risks from e-payments.
In fact, poor linkages exist in local financial infrastructure while there have been many gaps in the legal framework and the distribution network of credit institutions.
In order to spur the nationwide development of non-cash payment methods, Hien emphasized the significance of utilising fintech platforms to diversify distribution channels and expand them in localities which have limited access to financial services.
She also urged additional public-private cooperation in efficiently developing an inclusive infrastructure that covers the retail payment system and ICT infrastructure.
Given this, deputy Governor Nguyen Kim Anh stressed the diversification of financial institutions and channels as an effective solution to overcoming the existing hindrances to e-payments.
Vietnam’s ever-growing young population along with its increasing internet and mobile adoption rates presents huge opportunities for Vietnamese credit institutions to expand digital banking and payment services.
A brighter prospect lays ahead for those providing such services at a high security level and reasonable costs.
