Cash­less pay­ment needs a boost “

Viet Nam News - - BUSINESS -

HAØ NOÄI — Vieät Nam is en­ter­ing the Fourth In­dus­trial Rev­o­lu­tion with the par­tic­i­pa­tion of all sec­tors, in­clud­ing the bank­ing sys­tem; how­ever, non-cash pay­ment has seen de­vel­op­ment stall as the coun­try’s pop­u­la­tion has not yet em­braced its ben­e­fits.

Rep­re­sen­ta­tives from var­i­ous sec­tors and agen­cies dis­cussed how to pro­mote cash­less pay­ment sys­tems in ru­ral ar­eas at a work­shop in Haø Noäi yes­ter­day.

At the work­shop, Deputy Chair­man of Vieät Nam Farm­ers’ As­so­ci­a­tion Phaïm Tieán Nam said these cash­less sys­tems are a world­wide trend that some Viet­namese peo­ple have started to em­brace as an al­ter­na­tive to nor­mal cash trans­ac­tions.

“Non-cash pay­ments will be in­dis­pens­able as the coun­try’s tech­nol­ogy and econ­omy de­velop,” said Nam. “The whole world is mov­ing to­ward a cash­less so­ci­ety.”

Nam cau­tioned that the de­vel­op­ment of sys­tems in Vieät Nam, es­pe­cially in ru­ral ar­eas, was still lim­ited.

“About 40 per cent of Viet­namese peo­ple al­ready have bank ac­counts, but 90 per cent of pop­u­la­tion still spends cash daily,” he said. “Nearly 99 per cent of peo­ple use cash to pay for com­modi­ties val­ued be­low VNÑ100,000 (US$4.3), and up to 85 per cent of ATM trans­ac­tions are cash with­drawals.”

Cash is also fad­ing away in tax pay­ments. Elec­tronic tax­a­tion was im­ple­mented for the first time in 2014, and 95 per cent of busi­nesses have now regis­tered to pay taxes elec­tron­i­cally via com­mer­cial banks. The por­tion of tax rev­enue re­ceived elec­tron­i­cally has risen to 70 per cent, but there are still busi­nesses that pre­fer to make di­rect pay­ments.

The util­i­ties sec­tor is also mov­ing away from tra­di­tional pay­ment meth­ods. A re­port by Elec­tric­ity of Vieät Nam showed that there are 4.5 mil­lion cus­tomers pay­ing via banks and in­ter­me­di­aries, ac­count­ing for 18.47 per cent of users na­tion­wide.

There may still be so many hold­outs be­cause peo­ple are afraid of change.

Ac­cord­ing to Nam, do­mes­tic con­sumers and ru­ral farm­ers of­ten use cash be­cause it is fast, con­ve­nient and ac­cepted uni­ver­sally. It is also easy to man­age a cash bud­get with­out wor­ry­ing about ad­di­tional costs. Cash pay­ments are se­cure and pri­vate be­cause they leave no dig­i­tal trace and re­veal no per­sonal in­for­ma­tion.

Nam said that while Viet­namese con­sumers, es­pe­cially those in ru­ral ar­eas, had been en­cour­aged to use cash­less pay­ments, the sys­tem’s in­fra­struc­ture re­mained weak.

Un­of­fi­cial statis­tics re­port that, ex­clud­ing Agrib­ank, com­mer­cial banks have only two or three trans­ac­tion points in each ru­ral district. Mean­while, ur­ban dis­tricts have nearly 40 trans­ac­tion points on av­er­age.

Nghieâm Thanh Sôn, Deputy Di­rec­tor of the Pay­ment Depart­ment of the State Bank of Vi­etä Nam (SBV), said more than 60 per cent of the pop­u­la­tion in ru­ral ar­eas uses smart phones, which could sig­nify favourable con­di­tions for non-cash pay­ment sys­tems to de­velop.

“The chal­lenge now is to ex­pand the net­work of card ac­cep­tance points to help peo­ple make small trans­ac­tions in ru­ral and re­mote ar­eas,” Sôn said. “In ad­di­tion, the Cen­tral Bank should al­low non-bank or­gan­i­sa­tions to pro­vide col­lec­tion and pay­ment ser­vices to en­sure users have enough op­tions.”

Sôn said that among the tens of mil­lions of suc­cess­ful daily trans­ac­tions, a very small num­ber of failed trans­ac­tions had caused cus­tomers to doubt the ef­fi­cacy of the whole sys­tem.

“No mat­ter where the er­ror comes from, whether it is the fault of the bank or the user, peo­ple will still be con­cerned,” he said. “The State gov­ern­ing body will al­ways fol­low up on these prob­lems. We will en­sure we work to help peo­ple who have lost money in these cases.”

Nguyeãn Vieät Haûi, head of Agrib­ank’s Re­search and Ser­vice De­vel­op­ment Depart­ment, sug­gested the State Bank and rel­e­vant agen­cies study mech­a­nisms for charg­ing costs like with­drawal fees at ATMs.

“There should be a pol­icy to en­cour­age peo­ple in ru­ral ar­eas to use mod­ern telecom­mu­ni­ca­tions ser­vices such as mo­bile phones, 4G ser­vices, in­ter­net bank­ing and mod­ern cash­less pay­ment sys­tems,” said Haûi. — VNS

Non-cash pay­ments will be in­dis­pens­able as the coun­try’s tech­nol­ogy and econ­omy de­velop.” PHAÏM TIEÁN NAM DEPUTY CHAIR­MAN OF VIEÄT NAM FARM­ERS’ AS­SO­CI­A­TION

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