Not only does cashless payment help reduce the volume of cash in circulation but it also decreases the cost of printing, preserving, transporting money and human labour. The improvement in payment efficiency in the economy, of course, will contribute to increasing the speed of capital circulation of the society, promoting the development of production and the circulation of goods and currency.

It can be seen that, the COVID-19 pandemic has accelerated the trend toward a cashless economy, financial experts say, buoyed by the growth of e-commerce and the fear of handling paper money contaminated with the virus.

A report released by the Payment Department under the State Bank of Viet Nam (SBV), in the first quarter of this year, online transactions reached 156.2 million items with a total value of VND 8.1 million, up 55.9% in quantity and 28.4% in value, respectively. Transactions via mobile phone channels hit 395.05 million items worth a sum of more than VND 4.6 million, up 78% in quantity and 103% in value, respectively. QR code transactions were conducted with 5.3 million items valuing VND 4,479 billion, up 83% in quantity and 146% in value, respectively. Interbank electronic payment and financial switching system operated stably and safely.

The above-mentioned figures show that Vietnamese consumers have quickly adopted new payment methods without direct contact, namely touch-free payment.

In particular, every day the payment systems of the SBV have processed a combined total of  about US$25 billion worth of online transactions. However, as compared with the actual potential, this figure only accounts for a very small proportion because Viet Nam still records a high ratio of people using cash in transaction.

Data from International Data Group (IDG) revealed that in 2019, nearly 40% of the Vietnamese population had bank accounts, but over 80% still used cash for their daily transaction.

To promote e-commerce, the Prime Minister has issued a number of decisions to strengthen e-payments in the operation of national government agencies and public administrative services. Amongst them are Decision No. 241/QD-TTG dated February 23, 2018 on promoting payments through banks for public services including taxes, electricity and water bills, school tuitions, hospital fees and social security, and Directive No. 22/CT-TTg dated May 26, 2020 on developing non-cash transactions in Viet Nam.

In Da Nang, since the beginning of 2020, the Da Nang General Hospital, the largest of its kind, has pioneered in promoting non-cash payment through hospital fee payment solutions using ATM, VISA, MASTER cards, e-wallets and QR codes, and via the smart medical examination cards released by the hospital. This has helped the hospital deal with the overload of hospital fee payers, reduce work pressure on cashiers and limit the risk of in-hospital theft.

At present, this medical establishment is also partnering with banks to deploy smart medical examination cards for its patients in order to build electronic medical records for them in line with the roadmap set by the Ministry of Health.

The cashless payment has helped the State to prevent tax loss from hidden or non-transparent transactions, and reduce the risk of money laundering, thus playing an important role in facilitating credit institutions mobilise and accumulate temporarily unused capital from their customers.

For consumers, cashless payment does bring many conveniences in shopping such as easily controlling spending, avoiding forgetting to taking the change after making the purchase.
In light of COVID-19, the World Health Organisation (WHO) has recommended that the public should wash their hands after handling money. The use of cashless-payment methods helps individuals protect themselves and others.

In order to effectively implement the goal of going cashless, the core factor is to build synchronous public service payment infrastructure, thus creating the best conditions for the public to make non-cash transactions.

In addition, it is a need to complete the legal corridor, build up mechanisms and policies to develop e-payments, and improve public access to banking and payment services.

Reporting by DOAN HAO LUONG – Translating by A.T