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Vietnam Approves Project for Cashless Payments Development

The Deputy Prime Minister, Le Minh Khai, has signed a decision approving a project on the development of cashless payments in Vietnam for the 2021-25 period. According to a news report, it intends to create positive changes in cashless payment in an economy of a high growth rate and make cashless payments accessible in rural, remote, and mountainous areas of the country. It aims to improve security, safety, and confidentiality in non-cash payment activities while improving the operational efficiency of the banking system and enhancing the management of state agencies to boost transparency. This will contribute to the fight again corruption, economic crimes, and aid the prevention of money laundering.

It targets that the value of non-cash payments will be 25 times higher than the GDP, the proportion of the payment method in e-commerce will account for 50% by 2025. Additionally, 80% of people aged 15 will have bank accounts, while the number of points accepting cashless payments will increase to over 450,000 by 2025. The average growth rate in terms of quantity and quality of cashless payment transactions is projected to reach 20-25% a year. Transactions that are made via mobile phones hit 50-80% per year, with transaction values expanding 80-100% annually; and via the Internet growing 35-40% a year. The rate of individuals and organisations using cashless payment methods via e-commerce channels is hoped to reach 40%.

Regarding public services, almost all urban educational establishments are expected to accept tuition payment via cashless methods, and universities and colleges are required to collect fees on the national public service portal. Further, non-cash payment methods are hoped to be available in 60% of medical establishments in urban areas. 60% of pensioners and social security and unemployment allowance recipients will receive payments through cashless methods. Top priorities will be completing the related legal corridor and policies, upgrading payment infrastructure to be able to connect and integrate with other systems, developing modern payment services, and promoting non-cash payment in the public sector and others.

Last month, OpenGov Asia reported that the adoption of digital banking in Asia-Pacific (APAC) emerging markets, especially Vietnam, has caught up with developed markets. The data is from a report on the digital banking behaviours of 20,000 urban banking consumers across 15 APAC markets, including Vietnam. The report noted that the behaviour change has brought the financial services industry new prospects. The window for seizing opportunities will narrow quickly as consumers give serious consideration to innovative propositions from digital banks. It identified the gap between customers’ interest in digital banking and their actual actions, how banks can better capture opportunities from this gap, and the core technologies that can support banks in doing so.

The increase in active digital bank users is arguably higher in Vietnam compared with APAC’s emerging markets and some APAC-developed markets. Between 2017 and 2021, 88% of APAC consumers in emerging markets actively use digital banks, a 33 percentage points increase. In Vietnam, the numbers rose by 41 percentage points to 82% in 2021. At the same time, fintech and e-wallet penetration reached 56% in 2021 for Vietnam, a hike of 40 percentage points from 2017. This penetration level is higher than the average of APAC emerging markets (at 54%) and developed markets (43%).

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