Non-cash payments become increasingly popular

20-Jul-2019 Intellasia | Thoi bao Ngan hang | 6:02 AM Print This Post

With the trend of non-cash payment increasing rapidly, Vietnam is a potential market for traders investing in commercial activities with non-cash payments.

Mastercard, global payment services and technology company, completed the deal last week to acquire Transfast, a global payment company with an international network. According to Executive vice President of Mastercard, Stephen Grainger, Mastercard’s deal with Transfast contributed to building faster and highly predictive payment methods globally. People and businesses expected that real-time payments would be stable and predictable, catching up with modern life as well as daily needs. Currently, with the presence of 90 percent of global GDP, Mastercard was in the leading position to support their cross-border requirements.

In addition, Samish Kumar, Chief Executive Officer (CEO) of Transfast, said that with Mastercard’s global coverage, Transfast would have access to a network of over 100 countries. Accordingly, Transfast would develop in the field of account-to-account payment, help organisations improve operational efficiency and support the expansion of economic growth.

Mastercard’s acquisition of Transfast delivers a message about the rapid change in the payment market by technology. In Vietnam, Mastercard and Visa are providing the fastest payment processing network in the world, connecting consumers, financial institutions, businesses. Many credit institutions have linked with Mastercard to offer credit card products, for shopping, tourism, business and financial management activities.

According to the statistics of the Payment Department under the State Bank of Vietnam (SBV), by Q1/2019, the total number of cards issued nationwide was about 90 million cards. In particular, the total number of international cards (mainly Mastercard and Visa) issued in Vietnam reached over 12 million cards, up 1.6 million cards over the same period in 2018; while domestic cards in Q1/2019 reached 76.8 million cards, reduced by 4.6 million cards compared to the same period in 2018.

Although there were no statistics of domestic and international card transactions in Vietnam, card experts said that domestic cards were primarily used as a money-holding wallet, only for cash withdrawal. Meanwhile, Mastercard and Visa are working with credit institutions to collect fees from international card users to pay for purchases. Many domestic banks have recently linked with Mastercard and Visa to issue credit cards, but but the payment turnover is small and unbranded, so it is not enough to cover for Mastercard and Visa switching organisations.

According to the Payment Department (SBV) data, by Q1/2019, Vietnam’s population reached 96 million while there were 81 million personal accounts, although one could own two or three accounts. However, with the trend of non-cash payment increasing rapidly, Vietnam is a potential land for traders to invest in commercial activities with non-cash payment.

According to deputy Governor of SBV, Nguyen Kim Anh, the national payment infrastructure in 2018 was calculated by treating nearly 13 times the GDP. Besides, the commercial infrastructure had connected with all banks and payment intermediary organisations, supported most non-cash payment services. The legal payment rights in the territory are protected by Vietnamese law. These are important legal bases for inviting investment and encouraging members to participate in Vietnam’s payment market.


Category: Finance, Vietnam

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