Habit of using cash remains popular in Vietnam

Hanoi (VNA) - According to the Vietnam E-Commerce and Information Technology Agency, though the country's e-commerce market has seen significant growth, the habit of using cash remains overwhelmingly popular, accounting for 65 percent of online transactions.

In fact, some e-commerce firms said the number of customers opting for "cash on delivery (COD)" accounts for 90 percent, with few buyers using credit cards.

It is this habit of consumers that has hampered the growth of e-commerce, especially e-retailers, and not the lack of online payment facilities, as many experts claim.

With more than 120 million mobile subscriptions and more than 40 million internet users in Vietnam, electronic transactions have a lot of potential.

Besides, the number of ATM cards has increased relentlessly as more and more companies force their employees to collect their wages using ATM cards as desired by the Government.

The reluctance to use plastic forces many e-commerce players to keep tracking payments made in cash or by cheque and bank transfers at the desk instead of developing applications for online payments. This is a unique trend that runs contrary to what is happening in other countries.

Consequently, e-commerce firms accept higher operating costs because they have to pay delivery companies a considerable amount since they help them collect money from customers in addition to delivery.

The habit also has an effect on sellers' turnover since people paying cash are always more reluctant to part with their money than those paying by card. The product exchange/return rate is also higher in case of cash payments.-VNA