Boosting noncash payment in VN

Over recent times, non-cash payment has brought huge benefits to the economy, businesses, as well as users in VN

According to the Ministry of Industry and Trade (2015), with a population of over 90 million, of whom 49% use the internet and 34% use mobile phones to access the internet, e-commerce has been considered to have great potential for development in Viet Nam.

There remains large room for e-commerce development, especially as Viet Nam has been integrating more extensively into the world economy.

Viet Nam has already signed and are participating in negotiations to ink many bilateral and multilateral free trade agreements (FTAs). Viet Nam currently has dozens of economic and trade partners through the FTAs. The signing of FTAs is expected to help Viet Nam’s e-commerce to develop strongly in the near future.

In the period of 2011-2015, the increasing use of electronic cards in Viet Nam drove the consumption of goods to grow by 0.22%, and the contribution of card circulation to the country’s gross domestic product (GDP) reached more than US$800 million.

In 2015, the value of ATM transactions hit approximately VND1.56 quadrillion, the highest level within four years. All the indicators concerning card payment, such as the total value of transactions through ATMs, personal payment accounts or POS, have reported increases, showing a growing trend of using cards in payments among the Vietnamese people.

Along with the increase in the number of cards and investment in payment infrastructure, banks have now provided a number of basic utilities on e-banking, such as bank transfer; payment of electricity, water and telephone bills; payment of cable TV fees and airfares; purchase of goods online; and insurance payment.

The Government has issued Decision No. 2545/QD-TTg on non-cash payment in Viet Nam for the period of 2016-2020, targeting the installment of more than 300,000 POS card acceptance devices in the market by 2020, with about 200 million transactions per year.

In addition, the decision has also set a goal of 100% of supermarkets, shopping centers and modern distribution facilities having card acceptance devices and allowing non-cash payments for goods purchase; 70% of providers of electricity, water, telecom and communication services accepting payment of bills from individuals and households through non-cash channels; and 50% of individuals and households in big cities applying non-cash payments in shopping and consumption. It is also targeted that the proportion of people aged 15 owning bank accounts will increase by at least 70% in late 2020.

In Viet Nam, the bank card market was formed in the 90s of the last century. Up to now, the domestic card market has witnessed significant progress, contributing to the acceleration of non-cash payment pursuant to the orientations of the Government and the State Bank of Viet Nam.

By Vien Nhu