February 28, 2024

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Changing Consumer Patterns Propel Digital Payments in Vietnam

As the Lunar New Year (Tet) approaches, commercial banks in Vietnam are ramping up efforts to promote cashless payment methods through innovative initiatives and technological solutions, marking a significant shift in consumer patterns during the festive season.

According to a report by a major bank’s app is offering users a chance to participate in a game with prizes exceeding VND 20 billion (US$ 819,200) in value, encouraging various transactions such as money transfers, QR code payments, and bill payments.

Similarly, another bank has introduced a programme featuring 352 units of gold “che” as gifts, along with different types of refunds for customers making QR code payments through the Sacompay app. Other banks like MSB, VPBank, and TPBank have incorporated “li xi” (lucky money) features into their apps, providing users with opportunities to receive substantial rewards.

Deputy Director Nguyen Duc Lenh of the State Bank of Vietnam branch in Ho Chi Minh City emphasises the convenience and efficiency of cashless transactions, which benefit both buyers and sellers. He notes that these services not only stimulate sales and revenue, particularly during festive seasons like Tet but also contribute to a modern and secure payment ecosystem.

In addition to targeting individual consumers, commercial banks are extending their efforts to traditional market traders and small businesses, providing them with preferential programmes and solutions to encourage the adoption of QR code payments. This strategic move not only fosters a secure and modern payment environment but also facilitates the digital transformation of traditional business activities, enhancing competitiveness and service quality.

Furthermore, the surge in modern payment services has alleviated the pressure on cash withdrawals at automated teller machines (ATMs) before Tet. The National Payment Corporation of Vietnam (NAPAS) reports a significant decline in ATM withdrawals, accounting for only 3.6% of all transactions in 2023. Meanwhile, the NAPAS system handles over 20 million transactions per day on average, reflecting a growing preference for cashless transactions.

Overall, the concerted efforts of commercial banks to promote cashless payments ahead of Tet signify a transformative shift in consumer behaviour and signal the growing importance of digital payment solutions in Vietnam’s financial landscape.

Statistics highlight the rapid digitalisation of Vietnam’s financial landscape, with a significant increase in the adoption of digital payment methods. As commercial banks continue to promote cashless transactions and introduce innovative payment solutions, such as QR code payments, the country’s financial ecosystem is evolving to accommodate the changing preferences of consumers and businesses.

The percentage of Vietnamese adults with payment accounts has surged to 77.41%, a significant rise from 31% reported between 2015 and 2017, according to the World Bank. Banks have reported over 90% of transactions conducted digitally, with some reaching as high as 98%.

In 2019, the clearing house system recorded approximately 700 million transactions, skyrocketing to 7 billion transactions in 2023. Additionally, internet payment transactions saw a substantial annual average increase of 46.48%, mobile payment transactions surged by 90.12%, and QR code payments experienced an exceptional annual average growth rate of 471.13% since 2018.

This swell in e-commerce and the adoption of digital payment systems reflect a broader trend towards digitalisation in Vietnam’s economy. In 2023, the nation witnessed remarkable growth in its e-commerce market, reaching a value of US$ 20.5 billion, marking a 25% increase from the previous year.

This surge highlights the growing importance of e-commerce in Vietnam’s digital economy, driving economic development and fostering the digital transformation of businesses nationwide. Commercial banks, as leaders in promoting digital transactions, are leveraging innovative initiatives to encourage cashless payments.

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