Promoting electronic payments helps push back black credit

To promote the development of the electronic payment market, including the development of payment acceptance infrastructure (cards, QR codes...) and the development of domestic credit cards, the Workshop "Promoting the development of the electronic payment market in Vietnam" was held on September 15 to contribute to the implementation of the national strategy on promoting financial inclusion, cashless payments and contributing to pushing back black credit.

In his opening speech, Deputy Governor of the State Bank Pham Tien Dung said that developing non-cash payments, universalizing comprehensive finance, and promoting the electronic payment market to meet the increasing needs of people and businesses is an important task of the banking industry approved by the Prime Minister in the Project on developing non-cash payments in Vietnam for the period 2021 - 2025.

By the end of 2022, over 77.41% of adults in Vietnam had a bank payment account. In the first 7 months of 2023, non-cash payments increased by 51.14% in quantity over the same period, via the Internet channel increased by 66.46% in quantity, via mobile phone channel increased by 63.09% in quantity; via QR Code increased by 124.15% in quantity.

Finance - Banking - Promoting electronic payments contributes to pushing back black credit — Deputy Governor of the State Bank Pham Tien Dung speaks at the workshop.

Online account opening has been carried out since the end of March 2021. As of June 2023, nearly 27 million accounts have been opened using the eKYC electronic method. 10.8 million cards are in circulation using the eKYC method.

From the perspective of commercial banks, Mr. Le Hong Phuc - Deputy General Director of Agribank said that although card payments in particular and cashless payments in general have achieved great achievements, this boom is mostly concentrated in urban areas.

Meanwhile, rural and remote areas with 90% of cash transactions still have a lot of potential and are left open. The card payment acceptance system such as POS network is still quite thin, the development is limited while people are still afraid of the safety of new payment technology, which is a barrier to the expansion and development of cashless payments in this area.

According to Mr. Phuc, when talking about credit cards, customers often think of international credit cards. However, international credit cards on the market often have many fees, so customer accessibility is low.

Usually, the customers are mainly those with a good income or higher, who have the need to shop, travel abroad or have average or higher spending needs. Meanwhile, Vietnam with nearly 63 million people in rural areas is a potential market for the development of payment card products.

Finance - Banking - Promoting electronic payments contributes to pushing back black credit (Figure 2). — Workshop overview.

Mr. Phuc assessed: "The market still has a lot of potential, large customer segments, and outstanding product advantages. However, the development of domestic credit cards has not developed strongly and is still limited compared to international credit cards."

“In the coming time, to continue implementing the goal of promoting cashless payments, credit institutions and relevant parties need to continue to coordinate, invest in infrastructure, provide diverse payment products, expand payment acceptance infrastructure, build synchronous infrastructure to create conditions for people and businesses, especially in remote areas, to easily access and use banking services, and formal payments, contributing to financial inclusion and preventing black credit,” the Deputy Governor emphasized.

Proposing solutions, Mr. Pham Anh Tuan - Director of Payment Department, State Bank of Vietnam suggested: "Out of 39 million active cards, we have over 800,000 domestic cards, accounting for 8.7% of the total number of cards. Thus, facing the above situation, it is clear that we still have room to pay more attention to promoting the development of the domestic card market in Vietnam."

Finance - Banking - Promoting electronic payments contributes to pushing back black credit (Figure 3). — Mr. Le Hong Phuc - Deputy General Director of Agribank.

From the Payment Department perspective, Mr. Tuan proposed solutions such as credit institutions need to research and develop modern, safe, and multi-functional domestic credit card products to meet the diverse needs of customers. Domestic credit card products need to be designed to suit customer groups with different consumer behavior or payment habits.

In addition, there should be preferential promotional policies for customers using credit cards. In addition, it is necessary to promote the expansion of the card payment acceptance network, including domestic credit cards, connecting payments with public services and the fields of transportation, health care , insurance, etc.

Next, credit institutions need to strengthen communication and promotion of domestic credit cards to the public. This is an extremely important solution that needs to be implemented regularly and continuously.

At the same time, research and cooperate with foreign banks and card switching organizations to expand the scope of domestic credit card usage not only domestically but also for payment abroad to meet customers' payment needs .

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