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Rise in Digital Payment Transactions in Rural, Remote Parts of Vietnam

Over the past three years, the number of customers opening new accounts and registering for digital banking services in remote and rural parts of the country has been increasing. According to industry experts, this reflects a change in the payment habit of people, encouraged by the government and the State Bank of Vietnam (SBV).

The introduction of the Mobile Money service has become an important motivation for cashless payment in Vietnam. Data from the SBV show that so far, the country has nearly 72,000 transaction posts providing cashless payment services. Out of this figure, 39,000 are in rural and remote areas. In the first nine months of 2022, nearly 14 million customers, of whom 37.5% were from rural areas, used cashless payment services with a total transaction value of VND 167.68 trillion (US$ 7.09 billion).

For the Mobile Money service alone, as of the end of September, the service had 2.34 million accounts, including 1.62 million from rural and island areas. To date, about 15 million transactions worth nearly VND 950 billion (US$ 40.1 million) have been conducted.

The Deputy General Director of Viettel Digital stated that Viettel Digital expects to have two million users of its Mobile Money service, 60% of whom are in rural and remote areas, with more than 3,000 transaction points as of the end of 2022. Meanwhile, the Deputy General Director of the National Payment Corporation of Vietnam (NAPAS) explained that the organisation has covered more than 50 banks. Soon, the banking sector will continue to coordinate with the Ministry of Public Security to roll out effective piloted measures to further promote cashless payment in rural and remote areas. NAPAS, an intermediary payment service provider licensed by SBV, holds reserves equivalent to 50% of its capacity to ensure smooth cashless payment transactions. 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.

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

As OpenGov Asia reported, 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. The government aims for 85% of adults in the country to own and use smartphones.

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