Non-cash Payment Value Projected to Be 25 Times Higher than GDP by 2025

“By the end of 2025, the value of non-cash payments will be 25 times higher than GDP; non-cash payment in e-commerce will reach 50%; and 80% of people aged 15 years and over will have transaction accounts at banks or other authorized institutions.”

This is one of the specific goals in the Project on Non-Cash Payment Development in Vietnam in 2021-2025, which was approved by Deputy Prime Minister Le Minh Khai.

According to Decision 1813/QD-TTg, the overall goals of the project are to create a positive change in high-growth non-cash payment in the economy, making non-cash payment a habit in society for people in urban areas as well as in rural, remote and isolated areas; reduce social costs associated with cash; and strongly apply Industry 4.0 achievements to upgrade and develop non-cash payment infrastructure and services.

The Project also aims to increase people's access to payment services; and increase non-cash acceptance points to over 450,000.

It also sets the targeted annual growth of 20-25% in non-cash payment transactions and value; a 50-80% growth of mobile transactions and an 80-100% growth of mobile value; a 35-40% growth of transactions and value via the Internet; and a 40% growth of non-cash payment of individuals and organizations.

In public services, the targets of non-cash payment will be: from 90% to 100% of educational institutions in urban areas accept tuition payment through non-cash payment method; from 90 - 100% of universities and colleges in urban areas deploy online tuition payment on the National Public Service Portal; 60% of hospitals and medical facilities in urban areas accept non-cash payment for medical services; 60% of people in urban areas receive pensions, social insurance benefits and unemployment benefits through non-cash payment methods.

According to the State Bank of Vietnam (SBV), the non-cash payment system in Vietnam has developed strongly in recent years, driven by the participation of many organizations. As of mid-2020, 78 internet payment service providers, 49 mobile payment service providers, 30 commercial banks and six payment intermediary service providers cooperated to deploy about 80,000 QR Code points.

During the five-year period from 2016 to 2020, internet-based payment transactions and value increased by 262.5% and 353%; and mobile payments by 1,000% and 3,000%, respectively.

Without a doubt, the COVID-19 pandemic has given a strong boost to non-cash payments. In 2020 and the first months of 2021, as many social and economic activities were affected by social distancing measures, non-cash payment still achieved a good growth rate.

SBV data showed that transactions through the interbank electronic payment system reached 97.36 million items valued VND954 trillion in the first eight months of 2021 (up 3.32% in transactions and 41.37% in value over the first eight months of 2020).

Non-cash payment grew well in popular channels in the first eight months of the year: The Internet channel saw 435.25 million transactions valued VND2,278 trillion (up 54.13% in transactions and 30.70% in value year on year); the mobile channel witnessed a respective growth of 74.98% and 93.69%: and the QR code channel recorded a respective growth 66.81% and 133.12%.

In order to achieve the above objectives, the Project proposed some solutions like completing the legal framework to amend and supplement payment terms at relevant laws; completing and issuing regulations on electronic identification and authentication; applying regulations on personal data privacy protection.

By Quynh Chi, Vietnam Business Forum