Cash transactions remain highly popular in Vietnam compared to other ASEAN countries as it has low banking penetration. A new Standard Chartered report says Vietnam has the lowest bank account ratio in six ASEAN countries at 30.8 percent of the population aged 15 and up.
This ratio is 34.5 percent in the Philippines, 48.9 percent in Indonesia and 81.6 in Thailand. Credit card ownership in Vietnam accounts for only 4.1 percent of the population, compared to 9.8 percent in Thailand. The debit card ownership ratio, meanwhile, is 26.8 percent, lower than Indonesia at 30.9 percent and Malaysia at 73.8 percent.
Only 3.5 percent of the Vietnamese population have a mobile money account, while this ratio is 10.9 in Malaysia.
Even though the country’s e-commerce industry has been growing at a double-digit rate in recent years, 90.2 percent of online purchases are paid with cash, the report said. This ratio is highest, compared to only 47 percent in the Philippines where the percentage of the population with bank accounts is only slightly higher than that of Vietnam.
“Although there is a rise in alternative electronic means of payments in the region, cash still dominates. Apart from Singapore, the more traditional means of banking and payments remain more popular for the rest of ASEAN,” the report said.
The reasons for high cash usage, Standard Chartered said, is a lack of understanding of how digital payments methods work and how to start using them.
Others included concerns over the confidentiality of financial records and the perception that cash is still the simplest and most straightforward payment method, the bank said.
But there is still a lot of potential for cashless payment to grow in Vietnam, the report said, noting that with over 70 million mobile users and 64 million internet users, e-wallet payments are set to gain more traction in the coming time.
There are over 20 e-wallet apps in Vietnam, while foreign operators such as Samsung Pay, Alipay, and Amazon have also entered the local market to tap the large potential, the report said.
The value of e-wallets transactions in 2017 exceeded VND53 trillion ($2.2 billion), an increase of 64 percent from the previous year, according to the State Bank of Vietnam.
The government is striving to increase cashless payment in the country. A resolution issued in January recommended that cashless transactions made viable for all urban household bill payments by the end of this year, prioritizing mobile payments and payment via card readers.
Ho Chi Minh City this week has instructed all schools, hospitals and many others to accept non-cash payments.