According to the Central Institute for Economic Management, at the time of Decree 101/2012/ND-CP on non-cash payment becoming effective at March 26, 2013, the proportion of non-cash payment was 12.01%; and it is so far only at 11.49%. Meanwhile, the total amount of all means of payment increased by more than 234%. These figures show that non-cash payment in Vietnam has no growth compared to other payment means.
The cause of this ‘sluggishness’ is that people are used to paying in cash, unfamiliar with new payment technology, and fear of unsafe and uncontrolled electronic payment, especially overdue credit cards with high fee. Besides, small retailers are not acquainted to electronic payment. These factors lead to the widespread of cash.
Changing people’s habit of using cash is still a difficult problem for many years. Economic expert Nguyen Tri Hieu said that this would be a ‘revolution’ in the financial and banking sector and could not be done immediately. Although there are now many means of payment such as bank transfer, debit card, credit card and e-wallets, these means are still not popular. Cash payment accounts for 90 percent of total payment amount, even 99 percent of total payment for items less than 100,000 dong. Nearly 85 percent of transactions at ATM are withdrawals.
According to Dr Hieu, Vietnam is considered to have good infrastructure to reduce the proportion of cash transactions on total payment instruments. In order for non-cash payments to become common, it requires cooperation of consumers, retailers and the government.
For consumers, it is necessary to create trust so that they can see the convenience and safety of electronic payment. When users realise its benefits, they will gradually change their payment habit.
On the side of retailers, they also needs to apply information technology in paying. Even grocery stores should have applications such as QR Code and other applications that can accept payment via electronic wallets.
“On the government side, it is necessary to provide incentives for people to use non-cash payment facilities, such as tax and fee exemption; there is a need to enforce non-cash payments in some places such as hospitals or some other institutions managed by the government, such as BOT stations”, said Nguyen Tri Hieu.
Representing banks, Nguyen Manh Hau, Head of Data Management and Operation Department, Information Technology and Operations Division of Vietnam Joint Stock Export Import Bank (Eximbank) said that for non-cash payment to become popular, it is necessary to regularly promote on the mass media about the direction of the government and the State Bank of Vietnam (SBV) on the benefits of non-cash payment.
SBV should complete the legal framework for non-cash payment, specify mandatory non-cash payment categories, and diversify forms of payment authentication, such as password, fingerprint, and face recognition. In addition, it should pay attention to the development of technology infrastructure to serve full payment capacity, and apply new technology with better security.
According to Hau, businesses need to connect with fintech companies and banks to deploy payment through smart applications on mobile devices, especially smartphones, iPad, and laptops. Smart payment application must be user friendly.
