In recent times, the cashless consumption in Vietnam has been increasingly popular, after the government has taken drastic measures to direct this issue. In particular, in Resolution 02 of 2019, one of the breakthrough solutions is to strengthen cashless payment with specific objectives.
According to the deputy Governor of the State Bank of Vietnam (SBV) Nguyen Kim Anh, promoting electronic payment towards a cashless society is an inevitable development trend in the context of the Industrial Revolution 4.0, creating double impact both to promote economic growth and to support the implementation of a comprehensive financial strategy through universalising banking-financial services.
“However, the society without cash also raises concerns about the risks of confidentiality, data and network security. This is what Vietnamese regulators are focusing during the planning and implementation of policies towards a cashless society, “Deputy Governor Nguyen Kim Anh said.
In order to move towards a cashless society, SBV aims to build, modify and supplement the legal corridors for banking operations in general and payment activities in particular, meeting the requirements for the new business models and products and services based on information technology platform. They focus on digital banking and payment, constructing national payment infrastructure, processing real-time payment, continuous operation, meeting the increasing demands of consumers in the digital economy, especially with the ability to connect, combines and process payment for all goods and service suppliers.
SBV also promotes innovation and applies 4.0 revolution achievements in the banking industry, strengthening banking cooperation with payment intermediaries to create dynamic and breakthrough development in banking operations. Thereby, it can increase customer benefits and satisfaction; ensuring security and safety of information technology systems in the banking industry and protecting legitimate rights and interests of customers.
In 2019, the SBV Governor will actively carry out a number of major tasks and solutions to promote cashless payment such as: building a new Decree to replace Decree No. 101/2012/ ND-CP of the government on cashless payment. Accordingly, the Decree provides some solutions to expand the scope and objects of cashless payment service, promote communication and marketing of products and services to gradually change consumers’ psychology.
With the drastic direction of the government, cashless payment has achieved remarkable results in 2018. Data from SBV showed that in 2018, interbank electronic payment system handled safely with the value of 73 quadrillion dong (13 times of GDP, handling about $13 billion per day), growing by 25 percent compared to 2017. Mobile payment value increased by 169.5 percent compared to 2017. The survey of PwC audit firm for 27 countries recorded that Vietnam was the fastest growing market for mobile payment in 2018 with the proportion of mobile consumers jumped from 37 percent to 61 percent.
In addition, in the first three months of 2019, the interbank electronic payment system handled over 37 million transactions with the value of nearly 21 quadrillion dong, an increase of about 23 percent and 17 percent respectively compared to the same period in 2018.
As noted by the Ministry of Planning and Investment, the unit was assigned to monitor the application of Resolution 02 on the implementation of promoting cashless payment. In particular, it has made many positive changes right from the beginning of the year. Local action plans focus on this content. Some specific results on making cashless payments are recorded.
Currently, localities have been actively implementing solutions to apply cashless payment, especially in two big cities, Hanoi and Ho Chi Minh. Public schools in Hanoi have simultaneously applied cashless payment methods in tuition fees, highly appreciated by parents.
Implementing Circular No. 136/2018/ TT-BTC2, the general Department of Customs instructs the businesses to pay into the state budget including fees, charges and fines in cashless payment forms or through cash at commercial banks from April 1, 2019.
According to the Ministry of Planning and Investment, as of the end of December 2018, the proportion of cash payment to total payment means reached 11.49 percent. Cash use is popular with 90 percent; 99 percent for items under 100,000 dong; and nearly 85 percent of transactions at ATM are withdrawals.
In fact, to meet the increasing demands of consumers, commercial banks have integrated more features and utilities into bank cards to pay for goods and services at the point of sale, pay utility bills and online purchases. At the same time, they improve service quality, safety and security in card payment.
Many domestic banks have applied advanced technologies and new solutions to payment operations to increase payment speed, enhance safety, service security and increase users’ experience and satisfaction. For example, using biometric authentication cards (fingerprints, faces); payment on quick response code (QR Code); safe and convenient payment via encryption of card information (Tokenisation); contactless payment with speed and convenience and flexible payment acceptance solution on mobile devices (mPOS).
In addition, the payment infrastructure of many banks has connected, integrated and supported most payment transactions for the services of customs, tax, electricity and telecommunications. This facility will continue to be deployed and expanded to goods and services providers in the economy including public service providers.
