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Oct 09, 2017 / 18:20

Vietnam to incentivize non-cash payment by 2020

The State bank of Vietnam (SBV) has developed plan moving towards a 90 percent cashless economy by 2020 by reducing cash transactions and increasing electronic payments.

The plan issued by SBV is consistent with the proposal of non-cash payment in Vietnam in period 2016 – 2020 in accordance with the government’s decisions.


As such, the SBV will develop the use of electronic cards in transaction, including some methods such as Point of Sales (POS), Mobile Point of Sale (mPOS) and other similar methods can be accepted at the POS where customer can use cards to pay for their goods and services. 

With 90 percent of current transactions conducted in cash and only 30 percent of citizens having a bank account, the government faces an uphill task to achieve its goals. Nonetheless, recent regulatory reforms and emergence of private players in the last few years have been encouraging towards creating a sustainable digital payments market. In this article, we will look at the current state of the cash based economy, rise of fintech solutions, government cashless policies, rising internet penetration, and what the government needs to do to ensure the transition.

The SBV will continue review and apply some solutions with an aim to encourage payment through card, so that this trend will be more and more common in residential areas. Specifically, the objective will be to increase the number of transaction and the value of transaction through POS. By 2020, it is expected that Vietnam will have at least 300,000 POS installed with more than 200 millions of transaction per year; 100% super markets, shopping malls and retailers have the required devices to accept payment through cards, which will be used by customers when purchasing goods and services; 100% State treasury in provinces and cities under the central government management; state treasury in districts, wards under provinces and cities of central government management have required devices to accept payment through cards for the purpose of collecting revenue for state budget. 

In order to achieve this plan, it is necessary to continue developing and finalizing the technological infrastructure. Moreover, economic components need to apply new and modern payment method with high speed processing, but at the same time is simple and convenient, which includes the payment through scanning (with and without contact), payment through mobile phones using the technology of NFC/MST, or QR code scanning.

The network of POS and mPOS must be arranged efficiently, including the improvement in quality and services. The government needs to encourage non-banking institutions to cooperate and work with payment services providers, or intermediaries to invest, develop, manage, operate and provide the system network of payment through cards.

In particular, it is important to ensure the quick and safe process of transaction; increasing security and privacy during the transaction. At the same time, economic components can use some new technology for safety such as 3D Secure, QR code, Tokenization, which is suitable with the current trend of transactions in the world. Moreover, SBV also mentioned the promotion and advertisement, training skills and knowledge in finance sector, so that customers, related enterprises and organizations are aware of paying through POS, mPOS. 

Recently, there are many new transaction methods through smartphones being developed and piloting in Vietnam. Since the end of September, the payment method through smartphone called Samsung Pay has been officially implemented nationwide. According to statistics, as of September 28, which is the deadline for beta use, the number of download of Samsung Pay is 20,000 turns, while the number of transaction through Samsung Pay is approx. 6,000 turns.