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Contactless the future of payment industry

Released at: 09:47, 19/10/2017

Contactless the future of payment industry

Photo: Visa

Mr. Sean Preston, Visa Country Manager in Vietnam, Laos, and Cambodia, tells VET about the prospects for electronic payments in Vietnam and the company's expansion plans.

by Hong Nhung

  • What do you think about the development of Vietnam’s payment industry compared to elsewhere in the region?

According to Visa’s Consumer Payment Attitudes study, nine out of ten Vietnamese respondents are not only interested in new kinds of payment technology but are also willing to try new payment technologies, such as mobile payments. This is among the highest in the region, but is notable particularly for the fact that Vietnam is still a heavily cash-centric economy, so people are interested in new ways of paying, even if the market is still in a relatively early stage of development.

When comparing Vietnam to the rest of Southeast Asia, you need to bear in mind that you’re comparing markets that are vastly different, but I can say that we are very pleased with the progress that’s been made in the market so far. Though Vietnam is a relatively young market when it comes to electronic payments, we’ve seen very strong adoption from both merchants and consumers.

  • Can you tell us about your recent business performance in Vietnam?

Vietnamese consumers are continuing to embrace electronic payments, making 38 per cent more transactions on their Visa cards in the year ended June compared to a year prior. Visa credit card transactions were up 49 per cent and debit card transactions 34 per cent, while the total payment volume (or value) of transactions increased 35 per cent. More Vietnamese are also shopping online, with Visa’s e-commerce transactions up 82 per cent and e-commerce payment volumes up 45 per cent.

These numbers are a truly positive sign for Vietnam’s economy, as the country seeks to create a better environment for both consumers and businesses through the electronification of payments. One of the really great indicators for us is the strong growth across both credit and debit products. It’s a clear sign that we have a broad demographic of people using electronic payments for a variety of purposes.

  • According to Visa’s latest survey on payment attitudes, payment by cards only accounted for less than 5 per cent of all personal consumption expenditure in major cities and provinces. What challenges has Visa been facing in Vietnam? What could Visa do in order to change Vietnamese people’s preference for cash payments?

Vietnam is traditionally a cash-dominated economy. While consumers in some other markets are accustomed to the idea of using a card to pay for things, in Vietnam, we’re in the process of educating people on the benefits of electronic payments. When you’ve been brought up using cash, handing over physical money seems more intuitive than transacting using a card or smartphone. As such, we’ve been working tirelessly with stakeholders on all sides about the numerous benefits that electronic payments have over cash.

In terms of what’s needed to improve uptake, the most important thing we can do is provide more ways for people to enjoy the benefits of using electronic payments. A big part of this is working with merchants, providing simple, cost-effective ways for them to accept electronic payments, so that in turn, consumers will have more opportunities to pay with their cards or other payment devices. In this regard, probably the most important thing we can focus on is the “everyday spend” category, such as groceries, fuel, or quick service restaurants.

  • What has Visa been doing to bring the power of technological development to Vietnamese customers?

Visa continually innovates by enhancing its products, systems and services, and by bringing the benefits of electronic payments to more people in more places. In Vietnam, we have been focused on increasing the issuance and acceptance of Visa’s products around the country. We’re also working on bringing new innovative payments methods into the market. Take, for instance, the introduction of Visa’s contactless payment technology with Sacombank earlier this year.

With contactless payments, all you need to do is wave your card near the point of sale (POS) terminal briefly, and the transaction is done, allowing you to finish paying and get on with your life more quickly. The card has an embedded chip, which contains a tiny antenna that securely transmits payment instructions to and from a secure reader.

Visa contactless payments are now available at merchants around the country like Saigon Co-op, BigC, Citimart, and Nguyen Kim, with many more to come. Contactless payments have real, tangible benefits for consumers, as it allows them to make a payment in a matter of seconds, rather than fumbling for cash.

Another great example of a new technology we’re introducing to the market is Visa’s QR code payment service. It allows customers to use their mobile phone to scan a QR code at a merchant and securely transfer funds for goods or services. We have been working with our clients to bring this technology and we recently announced Visa’s first QR code payment service in Vietnam with Sacombank QR Pay. We see significant opportunity for QR code payments to help grow electronic payment usage and acceptance across the country, in particular at smaller merchants and in remote areas.

  • What are your specific development plans in Vietnam over the next year?

Broadly, there are three key pillars to our strategy in Vietnam: educating stakeholders about the value of electronic payments; building the number of locations where electronic payments are accepted; and bringing new payment technologies to the market, giving consumers more ways to pay.

As we close out 2017, we will be working to continuously expand the number of merchants where contactless payments are accepted, as well as looking at options to bring world-class digital payments to Vietnam in order to support the Vietnamese Government’s goal of having only 10 per cent of all transaction conducted using cash by 2020.

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