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The State Bank of Vietnam attempts to synchronize solutions towards a cashless society

The State Bank of Vietnam attempts to synchronize solutions towards a cashless society

Tuesday 23, 06 2020
Increasing demand for e-payments is always the future goal of the banking industry in Vietnam.
  • Non-cash payment activities are growing strongly

In the first months of 2020, under the direction of the Government, the State Bank of Vietnam has implemented with other ministries, branches, and relevant agencies to promptly implement many solutions to make clear changes in non-cash payment activities. In particular, in the context of the recent Covid-19 pandemic, utility payment products & services, many incentives, and practical support programs have created favorable conditions to encouraged people and businesses to use non-cash payment services. These actions will limit exposure and prevent the spread of disease as directed by Vietnam's government.

Mr. Tran Vinh Tuyen - Vice Chairman of Ho Chi Minh city highly appreciated the strong implementation solutions of the SBV and the units on the policy mechanisms and payment infrastructure. In particular, the policy of reducing fees when using non-cash payments in schools and hospitals has created a good interaction between the government and the citizens. Major changes in the finalization of the legal and policy framework for payment activities include: 

  • Completing in order to create favorable conditions for the application of new technology and modern payment infrastructure

  • Always interested in providing payment products and services. Safety, utility, and friendliness are the top 3 criteria to ensure.

  • Customers are placed at the center of priority in the supply of products and services

  • Legal rights are always guaranteed to help cashless payment activities have grown strongly.

Interbank electronic payment system operates safely, smoothly, stably with an average annual growth rate of 27.3% in total processing transactions and 20.3% in total value in the period 2016-2020. The system of switching and clearing has been effective, the growth rate in 2020 compared to 2019 reached 171% in the number of transactions and 96% in value.

The electronic payment ecosystem has been formed with the connection to the integration with other industries and sectors allowing customers to make online payment transactions for electricity, water, telecommunications, and online shopping at e-commerce sites, paying electronic taxes, some charges and fees when performing some public administrative services.

Moreover, with the strong application of the achievements of the 4.0 technology revolution in the field of payment, such as analysis of passenger behavior on big data (Big data), biometric authentication; application of quick response code (QR Code), encryption of card information (Tokenization), contact and non-contact chip payment (contact and contactless),  the development of cashless payment is still increasing. Card payment continued to grow strongly with an average growth rate of 51.4% in quantity and 33.8% in transaction value in the period of 2016-2020. In particular, payment on Mobile also has an impressive growth with an average growth rate of 85% in quantity and 158.5% in transaction value, as of early 2020.

The State Bank of Vietnam attempts to synchronize solutions towards a cashless society

  • Communication plays an important role in promoting people to pay without using cash

Ms. Ly Thi Hoai Thuong - Deputy Director of Tax Administration of small and medium enterprises also said that to change the habit of non-cash payment, the communication needs to be paid special attention.

Mr. Nguyen Ngoc Dung - Vice President of E-commerce Association said the period of influence on COVID 19 caused many consumers to change consumption behaviors, including the use of non-cash payments. Propaganda on non-cash payment benefits should be further strengthened.

For using financial services in general and promoting cashless payment in particular, changing user habits are the challenge and obstacles. In order to change and create a habit of using non-cash payment, it is necessary that agencies and functional units coordinate to change perceptions and behaviors in order to change or even form new habits with consumers using financial services.

For the communication on non-cash payment, the SBV has been proactive, responsible, and actively coordinated with relevant agencies to develop communication programs to the public on utilities, values, how to use the non-cash payment methods to ensure security and safety. In particular, transparent communication on fees for people to feel secure to use as the principle of managing fees for using banking services according to market mechanisms, with the competition, so benefits and choices belong to customers such as Free services, reduced fees. In fact, in order to encourage people to use non-cash payment methods, relevant agencies need to communicate so that users understand utility, security, safety, and low cost. These important factors that have formed and changed community habits in recent years.

Only in 2020, the State Bank has cooperated with related units, especially press agencies, credit institutions to implement many educational communication programs to universalize talented knowledge. The main reason is the non-cash payment with diversified and plentiful content aimed at the general public and especially the youth and students who are pervasive in the community like the “Tiền khéo tiền khôn”, “Những đứa trẻ thông thái”, “Đồng tiền thông thái” and “Hiểu đúng về tiền”. Especially, the "cashless payment day" contributes to promoting cashless payments and fulfilling the goals of the national comprehensive financial strategy.

  • The digital ecosystem towards a cashless payment system in the future

By the beginning of 2020, many modern and convenient payment products and services have been provided, especially mobile payment services, which have really come to life. People can easily see daily images of customers using 24/7 online money transfer services, bill payment, shopping, and online payment on mobile applications, payment by scanning method. QR Code, …

Ms. Nguyen Kim Anh - Deputy Governor of the State Bank said that Vietnam's banking industry has obtained these results because of

  • The Government's guidelines on promoting non-cash payments have been concretized by appropriate and timely mechanisms, policies, and legal framework of the State Bank, ministries, branches, and localities. ..has really come to the life of the citizens.

  • The continuous investment and creative endeavors of banks and payment intermediaries cooperating with suppliers of goods and services in designing and providing modern payment products and services to meet the needs of people and businesses

  • The media and press agencies have timely informed and promoted in order to create a shift in customer behavior in choosing payment services.

Moreover, Ms. Kim Anh believes that the authorities, businesses providing goods and services, the media will continue to accompany the banking industry to continue effectively implementing the development project. Non-cash payment in the next phase. The data on non-cash payment will continue to achieve impressive growth, continuing to show that policies on promoting non-cash payment in Vietnam will come into people's lives.

The State Bank wants to 'tighten' regulations on credit provision and bond investment by financial companies

Complied by Vietnam Credit

Banking & Finance

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