A lack of cooperation between banks, service providers and customers is the major issue preventing the widespread use of cashless payments in Vietnam, Nguyen Dinh Thang, Chairman of LienVietPostBank’s Board of Directors, said at the Banking Vietnam 2019 event in Hanoi on May 30.

Illustrative image (Source: zing.vn)

If banks want their customers to pay electric bills on their systems, they should work with the power sector to develop a customer database and then offer the online payment service to users, he said.

The money spent on bills will be deducted from users’ e-wallets and bank cards, then transferred into power firms’ accounts.

The Government has tried to reduce the use of cash across economic sectors. The State Bank of Vietnam (SBV) should work with commercial banks to develop a 24-hour transfer system so bills can be paid even in the middle of the night, Thang said.

The Vietnamese banking-financial system has made significant development in recent years, allowing customers to gain more access to financial-banking services.

Major audit firm PricewaterhouseCoopers (PwC) last year classified Vietnam as the top growing market in terms of mobile payment.

According to the SBV, the value of mobile and internet payment transactions last year were up 19.5 percent and 169.5 percent year on year, respectively.

Many banks and financial institutions in Vietnam have used digital solutions to cut costs, increase processing speeds and strengthen security for their clients, said Nghiem Thanh Son, Deputy Director of the SBV’s Payment Department.

QR codes are one of those tools. Others are biometrics, contactless payment and tokenisation. There are 16 banks offering QR code payment at a total of 30,000 stores and shops across the country.

However, the development of the cashless payment segment has remained limited as the infrastructure is only well-developed in the urban areas, Son said. Disadvantaged localities have been left behind.

A majority of people still want to pay for goods and services in cash because they fear potential risks of cashless payment services, he said.

SBV Deputy Governor Nguyen Kim Anh said the banking system must move forward with digitalisation and centralise customers online because virtual interaction has become more favourable to most customers than face-to-face meetings.

Banks and financial institutions are urged to acquire Industry 4.0 technologies to provide additional high-tech banking services, she said.

A smart customer database must be explored so banks can deepen their understanding of customers and offer more customised, reasonably priced, convenient and secured products and services, Anh added.