In a revolutionary shift, Vietnamese consumers are transforming their financial landscape through the embrace of digital banking. Enabled by a smartphone application, users now wield the power to conduct seamless payment transactions, effectively carrying a bank in their pockets.
This transformation is represented by individuals like Cao Huyen, a 28-year-old communication professional in Hanoi. Huyen, having shifted from initial usage during the Covid-19 pandemic to now making it a habit, highlights a broader trend. A VISA survey indicates that 65% of Vietnamese consumers carry less cash, with 32% committing to abandoning cash post-pandemic. Currently, nearly 76% of consumers engage with at least one electronic wallet service.
As of July 2023, Vietnam witnessed a surge in card circulation, with over 140 million cards, including nearly 10.8 million, activated through eKYC (electronic Know Your Customer, an alternative to the traditional process that required physical documents). The metrics for cashless payments depict a positive trajectory, with a significant 49.71% increase in non-cash payment operations over the initial eight months of 2023. Internet transactions, smartphone transactions, QR code transactions, POS transactions, and ATM transactions have all experienced substantial growth, reflecting a pronounced shift toward electronic and cashless payment methods.
Government support has played a pivotal role in propelling this change. Initiatives such as the implementation of cashless streets in various provinces and cities, including Hanoi, Ben Tre, and Da Nang, have been well-received by the public. Statistics also indicate that 75% of adults in Vietnam now possess a bank account, with 3.71 million Mobile Money accounts opened.
The surge in non-cash transactions is further fueled by the development of digital banking applications and electronic wallets. With 82 credit institutions offering online payment services, 52 providing mobile payment services, and 51 licensed intermediary payment organizations, a robust ecosystem is driving this financial evolution.
KBank’s K PLUS Vietnam application emerges as a standout in this landscape. Boasting a user-friendly interface and personalized notifications, it has attracted over a million users in just two years. The application allows customers to perform various online banking transactions seamlessly, including opening accounts, transferring money, and making payments anytime, anywhere.
KBank, in alignment with the government’s vision of promoting non-cash payments, aggressively develops electronic banking services, modernizes payment channels, and ensures convenience for customers. The success of K PLUS Vietnam, with features like 100% online account registration, high security, and fee-free transactions, exemplifies the impact of customer-centric digital banking.
‘Headache’ about Financial Management
Navigating financial challenges becomes increasingly daunting, as evidenced by a Backbase report indicating that 67% of Vietnamese participants feel overwhelmed about financial management, the second-highest rate in the Asia-Pacific region, trailing only Thailand.
To address this, banks have introduced online financial management and savings services on mobile applications, providing a solution for managing and improving personal financial health. KBank, for instance, has introduced a new term deposit with special rates, along with a cash reward program on the K PLUS Vietnam app. This approach allows users to earn passive income with idle money, offering both safety and flexibility in managing their cash.
Solving the ‘thirst’ for SME Capital
As businesses grapple with economic challenges, especially small and medium-sized enterprises (SMEs), accessing credit becomes a critical concern. According to Chat Luangarpa, Executive Vice President of KASIKORNBANK, SMEs in Vietnam face numerous challenges, from strict lending criteria to complex loan application processes, high interest rates, and a lack of guidance.
Optimal capital solutions, such as KBank Biz Loan, launched on Dec 8, 2021, provide crucial support to micro and small merchants, particularly during economic downturns. This one-time loan, ranging from VND 10 - 300 million, with a term of 12 - 36 months and without collateral or guarantors, emphasizes liquidity management for businesses.
Luangarpa emphasizes, “The digital banking services with efficient solutions offer numerous opportunities for the business community and serve as a crucial component to fill gaps in the credit market.”
In conclusion, amid a recovering economy, non-cash payment solutions and flexible lending options through digital banking applications are meeting the evolving needs of consumers and businesses alike, contributing to economic recovery and momentum acceleration.