The majority of Vietnamese people use cash in daily transactions. Photo by Shutterstock
Dao Minh Tuan, deputy CEO of Vietcombank, presented this suggestion at the Vietnam Private Sector Economic Forum 2019 Thursday.
He said that most businesses were reluctant to purchase point-of-sales (POS) devices or establish e-payment services with the banks because there were currently no incentives to attract them.
"Incentives, especially in taxes, will attract more businesses to cashless payment, which will increase payment transparency and reduce tax evasion," he said
Vietnam has been trying to promote cashless payments in recent years. Last year, fintech startups raised $117 million, highest among all startup businesses.
But local residents remain more reliant on cash. Sixty percent of Vietnamese population are eligible to open a bank account, but a majority of them, 80 percent, prefer to use cash in daily transactions, according to the Ministry of Industry and Trade.
Although e-commerce has been growing fast at 25-30 percent a year in recent years, 80 percent of customers still use cash-on-delivery payment for products they order online, the ministry said.
Le Xuan Vu, board member of Military Bank, said that tax incentives and other incentives are needed to increase cashless payment not only for businesses but also people at large.
"Cashless payment remains unpopular in Vietnam because people prefer to see and touch products before paying for them. If local banks can guarantee to compensate customers for fraud and fake products, they will trust cashless payment and use them more regularly," he said.
A government 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.
The State Bank of Vietnam has been asked to come up with solutions that would promote the use of electronic wallets, wherein users can deposit cash into their e-wallets without the need for a bank account.