In recent years, Vietnamese banks have promoted their investment in information technology application to offer modern banking services. Electronic payment (e-payment) systems have operated effectively, making a contribution to modernising the local banking industry.
Alongside the modernisation of banking services, e-payment has been considered a third leap in banking payment. This has become a popular product of Vietnamese commercial banks. Popular e-payment services include electronic transfer, digital token-based payment services, such as electronic cash, cheque and smart cards, Internet banking, home banking, and inter-bank payment.
This development is promoted with the second phase of a project on modernising the Vietnamese banking industry, capitalised at US$100 million. Earlier, in May 2002, a project on modernising the banking industry and payment system with a subproject on inter-bank e-payment was carried out under the sponsorship of the World Bank (WB).
So far, eight banks have had online account systems, 55 banks and 215 branches have participated in inter-bank e-payment system, and 15 banks have issued ATM (automated teller machine) cards. Vietnam now has a total of 1,107 ATMs. By December, 2005, Vietnam is expected to have 1,830 more ATMs. Vietnamese banks will install an additional 6,325 ATMs in the 2006-2010 period. Alongside with the increase in the number of ATMs, the building of a switch centre for ATM connection and end equipment of banks is ongoing.
The number of card-based transactions and individual accounts has increased sharply. The number of individual accounts opened at banks has reached 6.2 million with 5.4 million accounts opened in State-owned commercial banks, 742,000 accounts opened in commercial joint stock banks, and 59,000 accounts opened in the remaining banks.
The number of inter-bank e-payment transactions has increased sharply, from between 2,000 and 4,000 per day in 2002, when the system started operation, to between 10,000 and 18,000 per day. The number of banks involved in inter-bank e-payment services was originally estimated at seven banks and between 100 and 150 branches. The figure has reached 54 banks with 215 branches. Overloading of the system has been seen in Hanoi and Ho Chi Minh City.
According to experts, the modernisation of the banking industry, in particular the payment system, has helped local banks get rid of stagnancy of capital. This has also helped eliminate fake cash shortage, which was seen popularly in the 1980s and 1990s. As a result, capital circulation has been boosted, thus helping increase the effectiveness of capital use in enterprises and organisations. However, experts say that banks should build up their staff members’ capability. This is an important factor, deciding whether a bank will succeed or not.
Dr Ta Quang Tien, head of the Information Technology Department of the State Bank of Vietnam, said that in the coming time, the inter-bank e-payment system would be expanded alongside with the perfection of legal documents and frameworks to match an electronic transaction environment. Also, Vietnamese banks will have to focus on renewing their customer accounting systems, expanding SWIFT payment, and promoting banking information security to further access to the world banking network.
Huyen Nhi
Vietnamese
