Policies needed to spur e-payment

The Government should review legal documents to develop the e-payment market, which is expected to hold huge potential for Viet Nam’s young population, with high rate of mobile phone use and internet together with continuously improving technology infrastructure. -- Photo doanhnghiepbacgianghcm.vnHÀ NỘI – Việt Nam should develop breakthrough policies to create momentum for the further development of electronic payments to meet the growth of e-co妹妹erce, said Phạm Nguyên Minh, director of the Institute for Trade Research and Development under the Ministry of Industry and Trade.Minh told the conference on the future of card payment and electronic money held in Hà Nội yesterday that the development of card payments and e-wallets in Việt Nam had not met its potential and taken advantage of e-co妹妹erce. The slow development could affect e-co妹妹erce in particular and the country’s socio-economic outlook in general while increasing costs for local cash management.

“E-co妹妹erce has become a growing trend across the world, thus making card payments and e-wallets a popular payment method in many countries, including Việt Nam,” he added.

Card payments take up the highest proportion of the e-payment sector despite the slow growth rate. According to a World Bank report, in  二0 一 四, card payment revenue was US$ 九 七 九 billion and would increase to $ 九 八 九 billion by  二0 一 九. E-wallets would see a surge and become the second most popular payment method, with revenue of $ 六 七 四 billion, by  二0 一 九, from $ 三 八 七 billion in  二0 一 四.

In Việt Nam, another report from Banking Việt Nam showed that by the end of last month, the number of issued cards was  九 九. 五 million. Việt Nam has around  一 七,000 ATMs and  三0,000 devices accepting cards. In  二0 一 五, there were up to  二 二. 二 million customers paying by cards.

The revenue from card payment has also been on the rise. The revenue increased from more than VNĐ 七 二 四 trillion in  二0 一 一 to VNĐ 一. 六 quadrillion in  二0 一 五.  

Credit cards have been diversified. Most international brand names such as American Express, Visa, MasterCard, JCB, Diners Club, Discover and UnionPay now provide services in Việt Nam.

The director said the card payment market and its potential in Việt Nam have seen strong growth. However, there are still shortcomings as the issue of credit cards has paid attention to the quantity but not quality. The proportion of local cards, though currently accounting for a high rate at  九 一 per cent, has a tendency to decrease in the card structure.

Meanwhile, most card payments were made through ATM ( 八 五 per cent) while the remaining payments were e-payments. The rate of cards under operation was  六0- 七0 per cent.

Dr Lê Huy Khôi from the institute said the Vietnamese people’s habit of using cash has dominated, especially in rural areas. The ATM system has not been distributed evenly despite rapid development. ATMs have been mostly located in urban areas.

In addition, the lending interest rate through cards has been at a high level, together with annual fees, cash withdrawal fees and foreign exchange fees.

Dr Nguyễn Thị Nhiễu said the Government should review legal documents to develop the market which is expected to hold huge potential for the young population, high rate of mobile phone users and internet together with the continuously improving technology infrastructure.

Management agencies and businesses should provide more services that avoid cash to encourage people to use cards.

Credit institutions should ensure the security of the payment system while strictly implementing regulations to minimize risks.

Experts also proposed regulations on businesses requiring payments through banks to increase transparency of their income and tax management.

Banks were asked to enhance investment in modern technologies, especially card devices while improving card service quality. They should also gradually reduce interest rates and fees to encourage people to adopt card usage.-- VNS