QR Code payment is among non-cash payment methods that have gained popularity recently. (Photo: VNA) HCM City (VNS/VNA) - An entrenched cash using habit and safetyconcerns are the main reasons for people not to switch to non-cash payments, aworkshop heard in Ho Chi Minh City on January 15.
Speaking at “Towards a cashless society” organised by Tuoi Tre (Youth)newspaper, Nguyen Kim Anh, deputy governor of the State Bank of Vietnam (SBV),said cashless payment was an irreversible trend due to its many benefits.
For consumers and merchants, this provided greater convenience, efficiency andsecurity and lesser risk.
The government also benefitted from the shift to electronic payment since itincreased transparency in the economy and reduced the underground economy.
For payment service providers, this could improve transaction efficiency andincrease revenue since they could offer many products and services.
But a cashless society did not always bring positive results, with somecountries with high level of non-cash transactions facing public concern aboutinternet security and user data privacy.
Other concerns related to operational risks such as power outages or naturaldisasters, and digital division among people in the form of those who hadaccess to technology and disadvantaged groups like old and low-income peoplewho did not.
In the two years since a Government decision on boosting non-cash payment beganto be implemented, the banking sector has seen a surge in the number oftransactions made through the inter-bank electronic payment system.
They were worth 73 quadrillion VND (3.2 trillion ÚD) last year, equal to 13times the country’s GDP.
Now on average, the inter-bank system handles more than 544,000 transactionsworth more than VNĐ289 trillion daily, up 25 percent and 24 percentrespectively from 2017.
Besides, a large number of people make internet and mobile payments. There are75 banks offering internet payment services while 41 offer mobile payment.
According to data from the central bank, as of the end of last September therewere 18,173 ATMs and 294,500 POSs (points of sale) in the country and 101million bank cards had been issued.
The number of personal accounts has risen to nearly 75 million. By mid-2018there were over 43 million people with bank accounts, accounting for over 60 percentof people aged 15 and above.
But according to Pham Tien Dung, director of the SBV’s payment department, thepromotion of non-cash payment in the country still faces several challenges.
“It is due to the habit of using cash, which is still common. People feel intimidatedby new payment technologies. The payment infrastructure is still concentratedmainly in urban areas and has not reached rural areas.”
He said to promote non-cash transactions, new payment products and servicesshould be designed to meet the needs of users, especially in rural areas.
“Payment service providers and merchants should establish stronger links sothat new payment methods and services can be implemented.”
He said the SBV would continue to strengthen the legal framework for cashless paymentand enhance the use of new and modern non-cash payment methods in public andsocial welfare services.
Asked about public concerns about security when using electronic payment, LeManh Hung, director of the SBV’s IT department, said the central bank had donea thorough risk assessment to ensure the safety of electronic payments.
“Every day the inter-bank payment system, which has been in operation since2002, has to handle around 300 trillion VND worth of transactions but has neverencountered any financial risks.
“The banking sector has adopted many biometric authentication solutions such asfingerprint, palm vein recognition and voice with high levels of security andanalyses user behaviour to identify risks.”
Besides, the SBV also supervised and urged credit institutions to applysecurity solutions for online and card payments.
"Banks must equip themselves with a security system that can monitortransactions, investigate fraud and analyse customer data to detect and preventrisks at an early stage.”
Tu Tien Phat, deputy general director of Asia Commercial Bank (ACB), quoted areport on Vietnamese e-commerce from Q&Me market research company as sayingcash is still the main payment method preferred by Vietnamese online shoppers.
The study showed that 80 percent of the respondents preferred COD (cash ondelivery).
He said to change people’s preference for cash the Government and SBV need tocreate an eco-system for digital payment that offers convenient and safenon-cash payment solutions.
Le Hai Binh, vice president of the Vietnam E-commerce Association, said one ofthe main reasons people use cash when shopping online is that they want to seethe goods before they pay.
“Now it is time for us to rethink the term COD. Why can’t it be collection ondelivery instead of cash on delivery?”
He said delivery people could bring along a credit card machine or mobiledevice to collect payment from consumers on delivery.
It would both help address the problem of trust and boost cashless payment, headded.-VNS/VNA
VNA
