HCM City – The Government has approved an e-commerce development plan for 2016-20 that targets 50 per cent of consumers switching from cash to other forms of payment.

The target has been set after factoring in the rapid increase in online shopping and electronic banking.

However, the plan acknowledges the need to significantly improve network security to convince residents to switch from cash.

E-commerce turnover $10b by 2020

The Government has set targets of 30 per cent of the population shopping online and spending US$350 a year each and business-to-customer (B2C) e-commerce turnover increasing 20 per cent to $10 billion, or 5 per cent of the country’s total retail and services turnover.

Besides, all supermarkets, shopping malls and convenience stores will accept credit cards.

Around 70 per cent of telecom, electricity and water service providers will accept online payments from customers.

Importantly, 50 per cent of consumers in big cities will use non-cash payment services.

The Government also expects 100 per cent of public services and all bidding to be online, with the contract implementation process published in the national bidding website.

Chiefs of several banks said the target of getting 50 per cent of residents in large cities to use non-cash payment methods would be achieved soon since online banking services like mobile banking are booming.

According to the E-Commerce and Information Technology Department, as of last year 48 million people were using the internet and 35 million had smart phones.

The E-commerce Index report showed that last year 27 per cent of smart phone users shopped using their phones and mostly paid through bank accounts, while 45 per cent of smart phone users searched for shopping information more than once a day.

Việt Nam is now among the top five fastest growing smart phone markets and one in which mobile payment technologies are developing rapidly.

A significant growth in the card market also represents a growing non-cash payment trend.

So far 45 banks have launched SMS banking and internet banking and 25 others have launched mobile banking.

According to statistics from the Việt Nam Banking Card Association, 82 million cards had been issued by the end of 2015, 90 per cent of them ATM cards.

Along with the number of cards, the value of payments made using them has also increased sharply.

Huỳnh Trung Minh, a banking expert, disagreed with the bank executives, saying: “The target of 50 per cent of people switching from cash is very hard to achieve because of poor infrastructure, limited legal framework, cash habit, and [the fact that] some shops even charge a fee if customers pay by card.

“If the Government would like to boost non-cash payments, besides investing in infrastructure, it has to be the biggest non-cash customer and provide public services with non-cash payments.”

Convenience but safety first

Economists said the potential of e-commerce using e-banking is huge if user can feel secure about making payments.

“E-commerce enterprises have not paid enough attention to mobile commerce,” Nguyễn Đình Thắng, deputy chairman of the Việt Nam Computer Association, was quoted as saying on the Government’s website.

At least 11.3 million customers have ordered on their phones so far, but only 15 per cent of websites have a mobile version.

Meanwhile, consumers remain worried about the quality of goods they buy online and security.

The 2015 E-commerce Index pointed out that the infrastructure and services have not met the demands of online payment.

Besides, while banks have issued dozens of millions of cards, most merchants are in big cities. – VNS