With the positive implementation of the Non-cash payment project (Project 291) of the State Bank and the related Ministries and organizations, the operation of non-cash payment has gained encouraging results. However, non-cash payment is only available in urban areas, while remaining limited in rural areas.
Non-cash payment through banks has been rapid, secure, accurate, and timely to meet the requirements of customers. Banks have focused on non-cash payment in the business sector and individuals through electronic means of payment, payment via card or online are constantly expanding, which builds opportunities for e-commerce development and application. This is an important basis for improving the quality of bank payment services, thereby reducing cash flow in the market to save costs and reduce risks for customers.
Interbank Electronic Payment System is operated with about 70,000 transactions per day with total value averaging about VND104, 000 billion; and is capable of meeting the growth in payments by 2020 with a capacity of up to two million transactions per day. This is the payment system “backbone” of the country, creating a breakthrough in technical infrastructure for non-cash payment as well as the basis for the development of new means and payment services.
According to State Bank statistics, of the total amount paid through banks, non-cash payment accounts for 86 percent, and electronic payment accounts for more than 74 percent. One quite popular means of payment is ATM cards, and ATM machines accept card payments (POS). Forms of non-cash payment have sharply increased, which helps boost the number of cards issued. Up to now the number of cards issued has reached over 34 million with 51 issuers and more than 240 brands of cards; the system has nearly 12,000 ATMs and nearly 58,000 ATM-accepting devices.
Yet, despite non-cash payment gradually speeding up and payment acceptance networks expanding, cash is still the primary means of payment in transactions in residential areas, and accounts for no small proportion of business payment.
On the other hand, non-cash payment is developed only in urban areas, while in rural areas, people still use cash as a main means of payment. Notably, although the number of card users has increased, its effects on reducing the amount of money in circulation is very limited; 80 percent of transactions through the ATM are to withdraw cash for expenditure and payment. Transfer services are only implemented in the same system of each bank. The card payment services such as payments for electricity, water, cable TV, telephone, and taxes are rarely used.
Currently, installing an ATM machine is a relatively big investment, so the deployment of banks in rural and remote areas like the districts is very limited, not to mention that the people do not want to use this service.
Besides, payment for goods and services via the POS machines is also very limited because not every store has card scanners. To pay for goods, service charge, customers must withdraw money from ATMs and cash now is circulating. In addition, online payment services such as Mobile Banking and Internet Banking just stop at a small scale.
To further promote the development of non-cash payment, after the deployment and connection of POS card accepting system in major cities like Hanoi, Ho Chi Minh City and Da Nang, the State Bank has directed branches in provinces and cities nationwide to deploy the connection and card payment via POS among card alliance, and to develop card payment via POS in the areas. The State Bank requires card issuers to actively coordinate with police agencies to review and implement plans to protect and ensure the safety of ATM systems.
In 2011-2015, in order that non-card payment better meets the needs of the economy and contributes to reducing social costs related to cash, according to economic experts and the State Bank, banks must focused on investing and developing technological infrastructure for non-cash payment. This will require research to develop, upgrade, improve and complete the system of payment, especially the important core payment systems operated by the State Bank. On that basis, the other payment system such as the retail payment systems, payment systems of credit organisations, stock payment systems, and inter-bank foreign payment systems will be integrated, connected to the core system to unify a common payment system, ensuring smooth operation and expanding the scope to form the basis for the provision of the non-cash payment mode.
In particular, banks need to focus resources to invest in construction of infrastructure for card acceptance network; to increase the installation and use of POS in trade centres, restaurants, hotels, recreation areas and tourism; to expand POS system connections among payment service providers to pay for goods and services, first in large cities, then nationwide. It should be reasonably lay out ATM networks in places with allowable conditions and demand. With availability and promotion, people will use this service more.
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