The habits of using cash still popular despite the boom of cashless payments

29-Jun-2021 Intellasia | VnEconomy | 5:02 AM Print This Post

At the press conference to account the results of the entire banking industry on June 21st, the updated data from the State Bank of Vietnam (SBV) showed that by the end of April 2021, there were over 79 internet payment service providers and 44 mobile payment service providers in the market. The entire market currently has about over 270,000 POS and over 19,000 ATMs.

As of late April 2021, compared with the same period of 2020, the growth rate through transaction channels in terms of quantity and value were respectively 65.9 percent 31.2 percent via the internet, 86.3 percent 123.1 percent via mobile phones, and 95.7 percent 181.5 percent via QR code.

Pham Tien Dung, director of the Payment Department (under the SBV), said that in the first months of 2021, despite being affected by the Covid-19, payment activities in the economy still took place safely, transparently and efficiently.

In addition, the continuous improvement in legal framework and policies in payment activities has created favourable conditions for the application of new and modern technologies to develop non-cash payments.

“The payment service fee exemption and reduction programmes continue to be implemented by the SBV and credit institutions to best serve the demand of online payment,” said Dung.

However, it is worth noting that while cashless payments are booming, the proportion of cash in the total means of payments is still very high and even tends to increase.

Specifically, the proportion of cash in the total means of payments was 11.05 percent by the end of 2020,11.53 percent by the end of April 2021, equivalent to about 1,430 trillion dong.

Decision No.2545/QD-TTg of the prime minister dated December 30th 2016 on approving the non-cash development project in Vietnam in the period of 2016 2020 clearly stated the goal to keep the proportion of cash on total means of payment below 10 percent by the end of 2020. Thus, compared with the above goal, the actual situation is almost opposite.

According to financial expert Nguyen Tri Hieu, legal regulations on cryptocurrencies as well as non-cash payments have gradually been completed, but Vietnamese people’s habits of using cash is still very popular.

“As long as people’s habits still widely exists, the cashless payment target seems to be far from achieved,” Nguyen Tri Hieu told VnEconomy’s reporter.

The SBV acknowledged that although electronic payment (e-payment) is booming but the use of cash is still relatively common in people’s civil transactions, especially in rural and remote areas; the e-payments in e-commerce remains low; the implementation of non-cash payments in the fields of health and education is still modest, etc.

The SBV said that, as oriented, the agency in the near future will promote financial communication and education to improve knowledge, skills, and accessibility to banking and financial services, contributing to promote non-cash payments and financial inclusion.

At the same time, the agency will continue to improve the legal framework to meet the requirements of new business models and technology-based products and services. In particular, the focus is implementing the new Decree and developing a Decree on a mechanism for controlled testing of financial technology activities (Fintech) in the banking sector, submitting the prime minister for promulgation of the Scheme on developing non-cash payment in the period of 2021 2025, and coordinating to synchronously carry out the solutions mentioned in the Scheme.

In addition, the SBV will collaborate with relevant ministries and industries to pilot the use of telecommunications accounts to pay for small-valued goods and services (Mobile Money); carry out the Plan on digital transformation of the banking industry to 2025, with a vision to 2030 in order to help banks and payment intermediaries provide safe, secure and convenient payment products to meet the increasing needs of customers in the digital era.

The SBV will also strengthen the assurance of security and safety of the information technology system in the banking industry, protecting the legitimate interests of customers.

 

Category: Finance, Vietnam

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