According to the State Bank of Vietnam (SBV), 2018 marked a great success in Vietnam’s electronic payment (E-payment) development. Internet payment, mobile payment achieved impressive growth rates in transaction value, respectively increased by 19.5 percent and 169.5 percent compared to 2017. PwC audit firm also ranked Vietnam as the fastest growing market for mobile payment in 2018.
By the end of Q1/2019, there were 18,668 ATMs, 261,705 Point of Sale (POS) machines installed at retail locations, distribution chains, hotels, hospitals, schools, etc. The number and value of domestic payment transactions of bank cards continued to increase, reaching 65 million transactions with a total amount of 171 trillion dong. Commercial banks integrated more features into bank cards to pay for goods and services, while improving the safety of card payment.
The quality of payment services had been significantly improved as suppliers applied new modern technologies to payment operations such as: applying biometric authentication, QR code, digitising card information, contactless payment, using smartphones as payment acceptance devices and so on. These new technologies and solutions improved safety, transaction security and brought convenience, cost reduction, and positive reveived by consumers.
However, E-payment in Vietnam still existed limitations. Nguyen Thi Hien, deputy director of the Banking Strategy Institute, said that at present, the rate of access to financial services in Vietnam is still low compared to the average level of countries with the same level of development. In addition, SMEs’ access to services was more limited than large enterprises.
In addition to the results in E-payment, Nguyen Quang Minh, deputy general director of National Payment Corporation of Vietnam (Napas) concerned that changing the habits of users, to encourage non-cash payment, was a huge challenge for banks. Because the development of banking, finance and payment services in recent years only focused on big provinces and cities, not focusing on the development of rural areas.
In addition, the proportion of Vietnamese adults using E-payment was lower than other countries in the region. Specifically, the rate in Vietnam was 23 percent, China was 67.9 percent, Thailand was 79.8 percent, etc.
According to Nguyen Thi Hien, one of the reasons for the slow development of non-cash payment is due to old habits, lack of understanding of new technologies, concern about the security of E-payment, not to control credit card fees when leaving overdue debts, and so on.
At the same time, financial infrastructure lacked interconnection; Current legal policies still had many gaps; Network and service distribution channels of credit institutions were thin and scattered; Service capacity of domestic financial institutions had not been fully developed; Suppliers of product and service or small shops did not have the habit of E-payment, etc. These were the main causes of widespread cash use in Vietnam.
Nguyen Thi Hien offered solutions to achieve the purpose of promoting comprehensive finance, non-cash payment in Vietnam. First of all, it must take advantage of monetary and financial technologies to diversify channels of providing banking products and services. In particular, attention should be paid to expanding appropriate channels of financial products and services to reach people.
Secondly, there should be special preferential policies such as opening bank account at no charge or requesting no submission of balance for people who had difficulty accessing financial services.
The state and the private sector needed to work closely to build an effective payment infrastructure including accessible retail payment system and technology infrastructure.
According to Nguyen Kim Anh, deputy Governor of SBV, this 4.0 context also required financial-banking institutions to boldly invest, strongly apply technologies, new solutions and innovative models to prevent network security risks and customer confidentiality protection. In particular, credit institutions needed to promote the exploitation and analysis of intelligent data to understand customers, to provide suitable products and services.
To overcome the current obstacles, diversifying the organisation and channel of financial service provision was an effective solution. With a young population structure, rapid growth in Internet and mobile usage, this would be an opportunity for Vietnamese credit institutions to develop e-banking services, to reach many customers with suitable costs.
