Challenges in Cashless Payments Present Obstacles for Vietnam
A conference led by Dr. Hoang Van Ninh, deputy director of the IDS, marked a crucial step in formulating a robust legal system to effectively manage and accelerate the progress of cashless payments in Vietnam. The agenda encompassed an overview of the sector, examination of legislative obstacles, and the development of strategies to streamline the cashless payment system.
Dr. Nguyen Quoc Hung, general secretary of the Vietnam Banking Association, provided insight into the current state of the cashless sector. He mentioned that around 68.7 million personal accounts have been opened at commercial banks, with internet and mobile payment services being offered by the majority of credit institutions and commercial banks. Additionally, the State Bank of Vietnam (SBV) has issued operational licenses to 21 intermediary payment service providers, further promoting cashless transactions.
However, the legislative infrastructure required to regulate electronic payments is still in its early stages. Concerns were raised by Hung regarding the lack of clear guidelines for online payment services, virtual and electronic currencies, and other complex issues. Many of these challenges are yet to be addressed by regulators or are in the early stages of development.
The conference emphasized the advancements made since 2016, with various legal regulations enacted to pave the way for providers of payment services to offer diverse products utilizing modern payment technologies. The Vietnamese government has also tasked the SBV with formulating decrees that influence cashless payment operations, aiming to define payment tools and regulatory mechanisms, particularly addressing the management of electronic money.
Dr. Tran Van, director of the IDS, highlighted the significant challenge policymakers face in developing cashless payments in Vietnam. He stressed the importance of perfecting the legal framework to facilitate cashless payments, encouraging innovation, and effectively managing the digital economy. Van also emphasized the need for investment in infrastructure and technology to enhance the quality and effectiveness of cashless payments.
Vietnam has witnessed a rapid surge in the adoption of Mobile Money services, particularly in rural, mountainous, and remote areas. However, the availability of cashless payment services remains limited, primarily targeting urban dwellers with higher incomes. To promote the growth of cashless transactions, redefining the legal framework, encouraging technological innovation, and ensuring effective governance in the digital economy are crucial.
Despite the challenges, Vietnam is emerging as one of the fastest-growing markets globally for modern payment methods. The Visa Consumer Payment Attitudes Study 2022 revealed that a majority of Vietnamese respondents anticipate Vietnam becoming a cashless society by 2030. Cash usage has declined, with a significant number of respondents utilizing mobile wallets and credit/debit cards for online and contactless payments.