Bank in Your Pocket
With a smartphone application, consumers can now perform all payment transactions, as if they have a bank in their pocket.
Scan Anywhere
Whether at the market, on a bus, refueling, having coffee, or even at a vegetarian restaurant, joyfully all involve scanning QR codes or transferring funds within seconds. Cao Huyen, 28 years old, communication staff living in Hanoi, recalls not using cash recently. Initially, Huyen used this service to limit contact during the Covid-19 pandemic, but now it has become a habit.
Not only Huyen but the payment habits of many people have completely changed after the pandemic. According to a VISA survey on the payment attitudes of Vietnamese consumers, 65% stated that they carry less cash in their wallets, and 32% affirmed that they would stop using cash after the pandemic. As of now, nearly 76% of consumers are using at least one electronic wallet service.
By the end of July 2023, Vietnam witnessed a substantial surge in card circulation, with over 140 million cards in play, including nearly 10.8 million cards activated through eKYC, as per data from the SBV. Encouragingly, the metrics for cashless payments portrayed a positive trajectory. Over the first eight months of 2023, in contrast to the same period in 2022, non-cash payment operations saw a robust 49.71% increase in transaction volume. Internet transactions surged by 62.25% in volume and 5.65% in transaction value, while smartphone transactions experienced a growth of 61.43% in volume and 9.46% in transaction value. Transactions via QR codes recorded remarkable jumps of 112.71% in volume and 11.18% in value, and point of sale (POS) transactions increased by 23.24% in volume and 23.45% in transaction value. Additionally, transactions through ATMs saw a rise of 15.48% in volume and 23.41% in transaction value. These statistics underscore a notable shift towards electronic and cashless payment methods, reflecting the increasing embrace and utilization of diverse digital payment channels across Vietnam.
The processing system of the National Payment Corporation of Vietnam (NAPAS) alone handles more than 20 million transactions per day.
There are more than one reason leading to the strong growth of the non-cash payment trend. One of the significant reasons is the support from various levels of government with policies integrated into daily life. This year, the People's Committees of many provinces/cities across Vietnam, such as Hanoi, Ben Tre, Da Nang, simultaneously implemented cashless streets, which were well-received by the people.
Additionally, statistics show that up to now, 75% of adults in Vietnam have a bank account, and 3.71 million Mobile Money accounts have been opened.
By the end of the first quarter of 2023, Vietnam had 430,000 points with payment card acceptance, combined with a nationwide network of QR code acceptance. This is one of the driving forces behind the development of non-cash transactions.
Furthermore, the development of digital banking applications and electronic wallets cannot be ignored. Currently, 82 credit institutions offer online payment services, 52 credit institutions offer mobile payment services, and 51 intermediary payment organizations are licensed to operate.
According to representatives of F&B businesses, Vietnamese consumers are returning to values when choosing to shop. In times of economic difficulties and tightened budgets, they spend time comparing quality and searching for "bargains" such as discounts, fee-free payments, etc.
Any business that solves customer problems will gain a competitive advantage. This is also the reason why in Thailand, KBank is always in the top rank in customers’ top of mind. K PLUS Vietnam application, has emerged as a typical case of the wave of non-cash payment applications, although still relatively new in Vietnam. K PLUS Vietnam allows customers to perform online banking transactions easily and fast such as opening accounts, transferring money, and making payments anywhere, anytime, supporting customers to have a firm saving accounts
Businesses that adeptly cater to customer needs secure a competitive edge over its competitors. In Thailand, KBank consistently achieves high customer awareness and recognition by actively addressing customer concerns. KBank has launched the KPLUS Vietnam application, a comprehensive mobile banking solution designed to enhance the banking experience for KBank's customers in Vietnam. The mobile banking application enables users to access their accounts and perform various transactions on the move, including checking balances, transferring money, and paying bills. The KPLUS Vietnam app boasts a user-friendly interface and personalized notifications that make financial management simple. With strong security features and encryption technology, it ensures the safety of transactions and user data. In summary, the K PLUS Vietnam app is aiming to be a leading banking solution in the market, offering KBank's customers in Vietnam a seamless and secure experience.
The bank is aggressively developing electronic banking services, modernizing payment channels and transactions, providing convenience to customers, and contributing to the government's and the State Bank's goal of promoting non-cash payments.
Thanks to customer experience and other convenient services such as 100% online account registration, high security, and completely fee-free transactions, K PLUS Vietnam has attracted more than 1,000,000 users in the Vietnamese market in just two years.
"Headache" about Financial Management
Facing the challenge of "tightening belts," according to Backbase (Netherlands), about 67% of Vietnamese survey participants feel overwhelmed about financial management. This rate is the second-highest among ten Asia-Pacific countries, behind only Thailand.
Among them, the admission rate of not knowing how to manage the country's money is the highest among the 10 surveyed countries. For many people, the biggest challenge in financial management is savings. Other difficulties include debt, retirement savings, money management methods, or portfolio management.
To address this "pain," many banks have launched online financial management and savings services on mobile applications, a solution to manage and improve personal financial health for Vietnamese users.
The bank introduces a tiered interest rate program in its online deposit service on the K PLUS Vietnam app instead of just maintaining a stable deposit interest rate. Therefore, users can earn passive income with idle money in a safe and optimized way through the high-interest rates the bank offers while still have enough flexibility in managing their cash.
Solving the "thirst" for SME Capital
The reduction in the spending ability of each individual consumer in the market also somewhat reflects the health of businesses. In this difficult economic period, according to Pham Thi Thanh Huyen, an IFC expert, currently, only 30% of small and medium-sized enterprises (SMEs) in Vietnam have access to credit. The remaining 70% are difficult or unable to access credit.
Meanwhile, according to Chat Luangarpa Executive Vice President, KASIKORNBANK, small and medium-sized enterprises in Vietnam face many challenges in mobilizing capital. Specifically, they have to deal with strict lending criteria, complex and time-consuming loan application processes, high-interest rates, lack of guidance and specialized support in the loan application process.
Optimal capital solutions such as KBank Biz Loan, launched on Dec 8, 2021, have greatly supported micro and small merchants, especially during the recession. This is a one-time loan of VND 10 - 300 million, with a term of 12 - 36 months, without requiring collateral or guarantors.
By having a proper liquidity management, businesses can efficiently manage their operations in every aspect; from enabling sales opportunity to eliminating unnecessary cost from shortage of cash. Flexible terms and payment methods ensure that the journey will be seamless. Guidance and specialized support from business expert team in application and repayment processes help customers make smart decisions and avoid common mistakes. KBank Biz Loan is not only another channel for getting loan but an end-to-end solution to help businesses having a better access to capital.
"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," said Chat.
In general, amid an economy still taking significant time to recover, non-cash payment solutions, as well as flexible lending solutions through digital banking applications, have effectively met the needs of consumers during this challenging period. Alongside this, optimized lending solutions have alleviated the financial strain on capital-starved businesses, contributing to the economic recovery and accelerating momentum.
