The Hanoitimes - Despite being one of the fastest growing e-commerce markets in the region, online transactions in Vietnam remains feeble.
Cash remains the main payment method for online shopping in Vietnam, as up to nearly 80% of online shoppers prefer cash-on-delivery (COD), according to Tu Tien Phat, vice chairman of Asia Commercial bank (ACB).
Phat made this statement at the conference themed “Towards a cashless society” held on January 15, local media reported.
Echoing Phat’s view, Deputy Governor of the State Bank of Vietnam (SBV) Nguyen Kim Anh said cash payment is still popular on the global scale in spite of the rapid expansion of e-payment methods, including mobile payment.
Anh referred to a study conducted by MasterCard that cash accounted for about 85% of global consumer transactions in 2013, while a survey by consulting firm G4S revealed cash made up 60% of all payment transactions in 2016. Additionally, the cash circulation as a percentage of global GDP in 2016 increased from 8.1% in 2011 to 9.6% in 2016.
To change Vietnamese customers’ preference of cash payment, Anh expected the SBV to complete the legal framework for the establishment of an ecosystem for digital payment.
Moreover, it is important to provide more incentives for customers for non-cash payment, Anh added, saying that a cashless society is an inevitable trend.
In 2018, Vietnam’s inter-bank electronic payment system (IBPS) processed safely 137.6 million transaction worth VND73,000 trillion (US$3.13 trillion), 13 times higher than the country’s GDP. As of present, 76 banks in Vietnam are providing non-cash payment services and mobile payment is provided by 41 banks, Anh informed.
A number of commercial banks have been incorporating new technologies to mobile payment process, including biometric authentication, QR code scanning, tokenization, contactless payment, among others.
Pham Tien Dung, head of the SBV’s Payment Systems Department, said as of September 30, 2018, Vietnam has a total of 18,170 ATMs, up 4% against the end of 2016, and 294,500 point of sales (POS) installed nationwide, up 11.8% compared to the end of 2016.
The country is on track to reach the target of having 300,000 POS by 2020, Dung added.
Dung stated that up to 80% of public servants currently receive salary through bank accounts. As of mid-2018, the country has over 43 million bank account holders, accounting for more than 60% of Vietnamese people aged 15 and up.
A survey by the World Bank showed that the number of non-cash transactions per head in Vietnam is 4.9%, much lower than China's 26.1%, Thailand's 59.7%, and Malaysia's 89%.
Despite being one of the fastest growing e-commerce markets in the region, the rate of online transactions in Vietnam remains low.
According to a plan on non-cash payment in Vietnam in the 2016 - 2020 period approved by the prime minister, by the end of 2020, the ratio of cash transactions will be reduced to below 10% and at least 300,000 point of sales (POS) are installed nationwide.
As of present, 40% of citizens in Vietnam have bank accounts. However, 90% of daily transactions are conducted in cash, while the rate goes up to 99% for transaction worth under VND100,000 (US$4.34), said Dao Minh Tuan, deputy general director of state-controlled Vietcombank.