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Digital Payments Increasingly Popular in Vietnam

Vietnam targets that by 2025, the volume of mobile payment transactions will grow by 50-80% while transaction value will surge by 80%-100% annually. It also aims for at least 80% of the population aged 15 and above to have bank accounts, the number of Internet payments to increase by 35%-40% annually, and the rate of individuals and organisations using cashless payments to reach 40%.

According to the Deputy Director of the State Bank of Vietnam (SBV)’s Payment Department, Le Van Tuyen, cashless payment methods like contactless cards, QR codes, and mobile banking for digital and e-commerce services are becoming increasingly popular in Vietnam, especially among young people. The country has witnessed a strong shift to electronic payment methods replacing cash, which is also a target of a plan for cashless payment development in Vietnam for the 2021-2025 period, Tuyen noted.

The plan has four major objectives. Firstly, the project aims to make non-cash payments a norm in urban areas and expand their coverage in rural areas. Secondly, it seeks to develop a safe non-cash payment infrastructure with various conveniences and facilities to meet the rising demand of firms and individuals. Thirdly, it strives to enhance the security and transparency of cashless payments, allowing authorities to better monitor economic transactions in the country. Lastly, it aims to realise growth targets set for non-cash payments in the short term, including 50% of transactions on e-commerce platforms being conducted through cashless payment methods.

The National Payment Corporation of Vietnam (NAPAS), an intermediary payment service provider licensed by SBV, holds reserves equivalent to 50% of its capacity to ensure smooth cashless payment transactions. Even during peak periods, the number of transactions accounts for just over 40% of its system’s designed capacity. It has also continually developed new products and services to meet market demands. NAPAS launched a set of domestic chip cards, including debit, prepaid, and credit cards, which are intended to support the central bank’s plan to switch from magnetic strips to chip cards.

To help promote cashless payments in public services, NAPAS has also connected payment infrastructure between 45 localities and 15 ministries, departments, and agencies that provide public services. The move supported online payment services for five groups of public facilities on the National Public Service Portal, including paying social insurance premiums, real estate taxes, traffic violation fines, and court fees, among others.

The proportion of adults using smartphones in Vietnam is 73.5%, and the government aims to increase the rate to 85% by the end of 2022, according to the draft National Digital Infrastructure Strategy to 2025. To achieve this, 8.6 million of the 10 million people using feature phones would need to shift to smartphones, as OpenGov Asia reported.

The Department of Telecommunications, under the Ministry of Information and Communications (MIC), has informed that by the end of 2021, Vietnam had 91.3 million smartphone subscribers. By March 2022, there were an additional two million smartphone subscribers, bringing the total number to 93.5 million. Hai Phong has the highest percentage of adults using smartphones with 78.4%, followed by Da Nang with 77.8%.

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