Is It Time To Say Goodbye To Cash? Cashless Transactions In Vietnam Rise By 76%

Jamie, an expat working as a teacher in Ho Chi Minh City, uses the MoMo app when paying for her groceries and home supplies. She also has a ZaloPay app for other transactions, such as topping up her phone and for online food delivery.

“I rarely bring more than VND200,000 cash whenever I’m out,“ she said. “I’ve been living in Vietnam for the past eight years, and I’ve seen the transition from having to bring all my cash to just scanning my purchases. This is way safer and more convenient for me.”

Vietnamese student and part-time language tutor Binh shares the same practice. “I only bring parking cash every day,” he said. “I only keep one VND200,000 bill in case shops don’t have the option to scan payments or buy petrol for my motorbike. That’s it!”

Like Jamie, Binh prefers to pay digitally and have everything on his phone. On top of that, he’s taking advantage of the government’s public services, such as ensuring their insurance information is well updated.

It’s safe to say that in Vietnam, whether you’re a millennial in the working segment or a Gen Z student, a cashless transaction has become the rule of thumb.

When asked whether they’re ready to completely go cashless, Jamie and Binh affirmed. However, they’re both aware that not everyone’s capable of switching. “I’ve lived a lifestyle that won’t make sense to others, so for me, while it’s convenient to go cashless, I can’t force others to adopt the same,” Jamie said.

“To me, it’s not an issue, but I still see my parents depend on cash daily, and I know it won’t be as easy for them to change as I did,” Binh said.

According to a survey conducted in the capital city through an event organized by the Hanoi Department of Industry and Trade in July, 65% of Vietnamese consumers carry less cash in their wallets. Some 32% said they would stop using cash after the pandemic, and 76% of consumers are currently using e-wallets.

It pushes suppliers and shop owners to improve the quality, convenience, and safety of cashless payment methods.

On Monday, Vietnam’s Ministry of Information and Communications said there was an increase in cashless transactions by 76% in quantity and 30.6% in value. The data was released during the third session on digital transformation chaired by Prime Minister Pham Minh Chinh, who’s also the chairman of the National Committee on Digital Transformation.

Addressing the opening session, PM Chinh stated, “The document of the 13th Party Congress has identified the national digital transformation as a very important task, associated with three main pillars including the digital government, the digital economy, and the digital society in which everything runs on digital technology where paperless and electronic means are the norm.”

The PM acknowledged that digitalization is an inevitable trend, and it is identified as a mandatory requirement.

According to 2021 data from the State Bank of Vietnam Deputy Governor Pham Tien Dung, 95% of all financial institutions in the country have been developing their digitalization strategy.

“Currently, over 80 banks have offered customers e-banking services; 44 banks have offered mobile banking services, and 45 fintech firms offer payment intermediary services. Across the country, there are currently over 90,000 stores that accept QR code payments and nearly 300,000 PoS terminals,” reads the report from the local media.

The number of digital technology enterprises was estimated to reach 67,300, an increase of 3,500 enterprises from December 2021.

About 99% of enterprises use digital platforms to pay taxes.

At the session, the Prime Minister emphasized that digital transformation is a major policy and orientation of the Party and State that must monitor and implement regularly. To implement comprehensive and synchronous tasks, all sectors and agencies must accelerate digital transformation. He also said civil servants should work hard for the country’s benefit and residents’ sake.

The Ministry of Information and Communications reported the country’s digital transformation in the first six months of 2022, adding that so far, they have coordinated with ministries and sectors to direct the development and evaluation of 50 digital platforms, including 18 platforms for digital government, 16 for the digital economy and 16 for the digital society.

To date, the national database development has been promoted to connect and share data for providing online public services and utilities to people and businesses.

The national database on health insurance information of 27 million households includes information of 98 million people. The national electronic database has about 28 million birth registration data; more than seven million children have been granted personal identification numbers as prescribed, and over six million people have been issued marriage registration. The government has issued over four million death registration.

Additionally, the national database has updated more than one million enterprises, and affiliated units have been updated in the national database.

In the same session, the Ministry of Information and Communication said the country’s digital economy's contribution to GDP rose to 10.41% in the first half from 9.6% in 2021. The Government initially planned to increase the said figure to 20% by 2025.

As of latest, the percentage of eligible public services delivered online at level 4 is 97.3%, and the rate of online public services generating dossiers is 45.7%, that 1.6 times higher than the same period in 2021. The online processing rate is 36.9%, an increase of about 10% over the same period in 2021.