Electronic wallets (e-wallets) and banks are spending billions of dong on promotion to make customers familiarise with QR Code non-cash payment method. However, this is an expensive, long-term game, and the fact is that customers will return to cash after promotions.
Ngo Van Duc, deputy Head of Payment System Supervision Division (Payment Department, State Bank of Vietnam (SBV)), said that about 24 banks are implementing QR Code payment services, not to mention fintechs and e-wallets.
In the recent time, numerous e-wallets and banks have launched promotional programmes to attract customers to make payment by scanning a quick response code (QR Code). Accordingly, if paying by QR Code instead of cash or cards, customers will receive an immediate 10-20 percent discount or an immediate deduction from the product price.
Thanks to the strong promotion of banks and e-wallets, the number of QR Code payment acceptance points has risen sharply. By the end of 2018, the country had only about 30,000 acceptance points, and this number reached 50,000 by mid-2019. Nevertheless, the number of customers using QR Code regularly has increased fairly slowly.
“In the recent time, e-wallets have poured a lot of money into promotion, but the number of customers using QR Code grows insignificantly. Most customers use QR Code when they have promotions and return to cash use when the promotions expire,” said Pham Cong Quynh Lan, deputy general director of Commercial Joint Stock Bank for Industry and Trade of Vietnam (VietinBank).
Sharing with reporters, leaders of many e-wallets admitted that the number of QR Code users has not increased as fast as expected, but since the market is at an early stage, e-wallets accept to “burn money” to create habits for users. The fund for promotions are shared by both e-wallets, banks and the points of sale.
Although QR Code payment is rising slowly, e-wallets, payment intermediaries and banks are still optimistic. Chair of the Board of directors (BOD) of Lien Viet Post Commercial Joint Stock Bank (LienVietPostBank, owner of ViViet e-wallet) said that “people are not yet familiar with QR Code but this is a very convenient and will soon boom.”
The problem now is that there are dozens of QR Codes of e-wallets on the market. These codes are not yet connected to each other, making it difficult for users. In fact, users rarely save more than three payment applications in their phone. To encourage customers to use QR Code more often, in addition to the need for a common standard, the number of e-wallets should be reduced. This means that the battle to attract users of e-wallets will be very fierce in the near future, and 70-80 percent of e-wallets will be eliminated. The ones that survive must also spend a lot of money on promotion to draw customer loyalty.
The ambition to turn QR Code into a cross-border e-wallet
Not only spending billions of dong to create habits for domestic customers, e-wallets and banks in Vietnam also want to use QR Code to serve foreign tourists, especially in markets that are familiar with this payment type such as China, South Korea, Thailand, etc.
Chair of LienVietPostBank said that the bank is cooperating with its Korean partner to test payment via QR Code. If the test is successful, the bank will apply for an official license to serve South Korean tourists to Vietnam and vice versa.
Previously, TPBank and UnionPay International Payment Organisation (UPI-China) also signed a payment cooperation agreement. Accordingly, Chinese and South Korean customers using UnionPay services can make payment via cards and QR Code in Vietnam at TPBank’s card acceptance points.
A few months ago, the SBV’s Governor and the Central Bank of Thailand signed an agreement on QR Code cooperation. In the immediate future, Vietnam will join Thailand in allowing tourists to use QR Code to make payment and issue a common standard between the two parties to ensure their payment network is connected.
Leaders of many commercial banks said that in the context of the current financial technology development, banks and e-wallets can entirely turn QR Code into a “virtual wallet” for cross-border payment, serving tourists from all countries.
In fact, if Vietnam does not deploy the service, customers also have many ways to make “underground payment” via QR Code that the SBV cannot control the cash flow, such as the case when Chinese tourists paying by QR Code in Quang Ninh, Nha Trang in the recent time. Thus, the coordination with countries to promote QR Code payment channel to serve foreign visitors is very essential.
