Cashless payment remains low in Vietnam: CIEM hinh anh 1The ratio of cashless payments in Vietnam remains low, standing at only 11.49 percent of total means of payment.(Photo: VNA)

Hanoi (VNA) - The ratio of cashless payments in Vietnam remains low, standing at only 11.49 percent of total means of payment, according to a recent report from the Central Institute for Economic Management (CIEM).

Up to 99 percent of transactions for goods and services valued below 100,000 VND (4.3 USD) are paid in cash, said the report.

According to a Government plan on cashless payment in the 2016-2020 period approved by the Prime Minister, the ratio of cash transactions will be reduced from 90 percent in 2016 to below 10 percent by the end of 2020. 

The Government has been trying to promote cashless payments in recent years, but a majority of Vietnamese people still prefer cash. According to the Ministry of Industry and Trade, 60 percent of Vietnamese adults have a bank account, but 80 percent of them prefer to use cash in daily transactions.

Although e-commerce has been rising rapidly at an annual growth rate of 25-30 percent in recent years, 80 percent of customers still use cash-on-delivery payments for products they order online, the ministry reported.

To boost cashless payments, banks are proposing tax incentives for businesses adopting e-payments, saying that cashless payment remains unpopular in Vietnam because people prefer to see and touch products before paying for them. Thus, if local banks can guarantee to compensate customers for fraud and fake products, they will trust cashless payments and use them more regularly.

Dao Minh Tuan, deputy general director of Vietcombank, said that most businesses were reluctant to purchase point-of-sale (POS) devices or establish e-payment services with the banks because there were currently no incentives to attract them.

Incentives, especially in taxes, would attract more businesses to cashless payments, which will increase payment transparency and reduce tax evasion, Tuan said.

As of September 30, 2018, Vietnam had a total of 18,170 ATMs, up 4 percent against the end of 2016, and 294,500 POS across the country, up 11.8 percent compared to the end of 2016.-VNA