In view of the global socio-economic situation facing profound and unpredictable changes, especially under the impact of the COVID-19 pandemic, the development of a convenient and efficient digital economy with minimal direct interaction and cumbersome procedures is becoming imperative.
The viral spread of the coronavirus has led to concerns that the disease can be spread through cash. With this viewpoint, consumers are increasingly willing to shop on e-commerce platforms, use e-wallets and non-cash payments, not only for convenience but also for safety.
The Mastercard payment service provider has also recommended using non-cash payments. the Mastercard non-cash payment limit in the UK has been increased from USD 37.67 (GBP 30) to USD 56.5 (GBP 45) to help customers cut down on cash usage. This new non-cash payment limit has been effective from April 1st.
Vietnam has been boosting the digitization of economic sectors, especially in terms of finance and monetary. The Government is also focusing on building policy corridors and partnerships with stakeholders to strengthen a sustainable foundation for the digital economy.
According to the World Bank's "Digital Economy in Southeast Asia - Building a Foundation for Future Development" 2019 report, six important pillars of all developed digital economies are connectivity, payments, skills, logistics, principles, and policies.
Among them, digital payments are seen as the driving force but also the inevitable consequence of the 4.0 revolution. According to the World Bank's representative in Vietnam, Vietnam is having an unprecedented opportunity to take advantage of non-cash payments to promote trade, manufacture, and consumption. Just within the past year, many consumers in Hanoi have actively switched to non-cash payments. Hundreds of thousands of business households nationwide have also joined the networks of major finance - technology firms, looking for opportunities in a growing digital market.
According to Safdar Khan, a veteran member of Mastercard, Vietnam has become a Fintech hub in ASEAN. In particular, Ho Chi Minh City and Hanoi emerged as the "capitals" of Fintech and technology, especially in 2019, 36% of investment capital in Vietnam flowed into this field.
As of September 2019, there were 59 million Internet users in Vietnam. According to GlobalWebIndex, 78% of Internet users in Vietnam aged 16 - 64 have been shopping online. In 2018, Vietnamese consumers spent nearly USD 6 billion on shopping online. According to the Payment Department of the State Bank of Vietnam, transactions through phone applications in 2018 increased by 126%, while via e-wallets increased by 161%. This was a very impressive growth step. Vietnam's e-commerce market is also expected to become the second-largest market in Southeast Asia, after Indonesia in the next six years.
Based on experience and in-depth knowledge in markets around the world, Mastercard assesses that Vietnam will have a much faster speed of transitioning to non-cash payments in the next few years, especially with open cooperation between public and private sectors.
However, in this area, we have still faced certain obstacles in disseminating information and changing customer behaviors. Although many Vietnamese people are more familiar with non-cash payments, most transactions on the market today are still based on cash. Non-cash payments mainly appear in large cities. According to 2019 statistics, only about 41% of adults in Vietnam had a bank account.
It is not easy to change the Vietnamese people's habits of cash consumption. However, this is just one of the challenges of non-cash payments. Strong cooperation among the government, private sector, and non-governmental organizations is needed to expand people's access to and use of formal financial services. Besides, payment technologies should be developed to support economic organizations to expand operations and implement modern payment methods for people in remote areas.