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Hanoi Aims to Raise Cashless Payments in E-Commerce to 45%

The Hanoi Department of Industry and Trade is taking measures to bolster the use of cashless payment methods to fuel e-commerce, technology applications, and digital transformation. Hanoi is looking to raise cashless payments in e-commerce to 45% and transactions with electronic bills on e-commerce platforms to 65%.

The city also aims to raise the amount small and medium-sized firms doing business on e-commerce platforms to 45% and enterprises engaging in e-commerce via mobile applications to 35%. It is also working to increase the rates of customers paying water and power bills online to 98% and 99.7%, respectively.

Last month, the Department organised an event, bringing together several enterprises, trade centres, supermarkets, convenience stores, and e-commerce platforms in the service sector. Addressing the event, Acting Director of the Department, Thi Phuong Lan, stated that authorities hope to promote the habit of using non-cash payment methods among residents, creating momentum for businesses to develop non-cash payments and e-commerce, and stimulate demand, thus helping Hanoi remain one of the top two localities in the annual E-Business Index rankings. As part of the event, the Department will advertise information about cashless payments through social networks, posters, leaflets, and TV programmes.

OpenGov Asia recently reported that the Vietnamese financial technology (fintech) market could grow to US$ 18 billion by 2024. The country is a leader among ASEAN members in terms of the volume of financing for fintech, second only to Singapore. Over 93% of all venture investments in the country are directed at e-wallets and the e-money segment. The total number of fintech companies has grown to 97 since 2016, an 84.5% increase. However, the number of newly-launched start-ups each year decreased from 11 to 2. The market features high competitiveness and a high entry bar. Transaction volume has seen a 152.8% growth since 2016, with 29.5 million new fintech users. As a result, every second Vietnamese citizen uses at least one fintech service. Demand for digital services (transactions, payments, and wallets) in the country is high. According to industry analysts, Vietnam’s fintech sector is young and promising. The market valuation has increased from US$ 0.7 billion to US$ 4.5 billion since 2016.

The government will become more involved in fintech, evidenced by the growing favourable legislation for financial technologies. The fintech regulatory sandbox and the legal framework for digital assets and cryptocurrencies will also further developments in the industry. The government 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%.

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.

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