Vietnam seeks to reduce cash transactions

Speaking at the Vietnam E-Payment Forum 2015, Deputy Prime Minister Vu Duc Dam said that although Vietnam’s e-commerce market has seen recent growth, in-cash habits in Vietnam are still overwhelmingly popular, accounting for 65 per cent of total payment transactions.

"This habit has hampered the country’s economic development as well as people’s living standards," he said.

Dam highlighted how other countries’ electronic payment behaviour accounts for 90 per cent of their total payment values and helped increase their GDP by about 1 per cent.

With more than 120 million mobile subscriptions and more than 40 million Internet users in Vietnam, electronic transaction processes have a lot of potential, he said.

The Deputy PM said that in 2014, e–commerce in Vietnam was valued at almost US$3 billion (Bt108 million), and was expected to reach about $4 billion in 2015 and $7 billion in 2017.

There are many direct transactions between people and the government, such as paying taxes or paying for public services like electricity or water, transactions that he argued could make a big market for electronic payments.

"Although the e-payment has a huge potential and many advantages, its growth is still lower than the government's expectation," said Dam.

Sharing the Deputy PM’s opinion, deputy governor of the State Bank of Vietnam Nguyen Toan Thang spoke at the conference about banks’ active implementation of electronic tax collection. Despite the large number of businesses registered to enter e-tax payment, the actual use was moderate, he said.

One of the main reasons for the discrepancy is that e-tax payment relies on information technology that requires co-ordination between various agencies, and therefore has been hard to implement, said Thang.

He said the central bank, in co-ordination with the Ministry of Finance, provided concrete measures to set up a smooth electronic connection system and conditions favourable for taxpayers.

Thang called for support from foreign organisations to help Vietnam develop electronic payment systems.

"I am very optimistic about e-payment. However, besides efforts by relevant agencies and ministries, we need co-operation with foreign institutions," he said.

Thang said to make companies and people accept this new mode of payment, the government should offer incentives.

Visa’s country manager for Vietnam, Cambodia and Laos, Sean Preston, said he has lived in Vietnam for a long time, long enough to see that Vietnamese people are able to access electronic technology and that it had the potential to grow the country’s economy.