On June 11, 2019, Ms Tran Thu Huong, Head of Retail Banking – Strategic Businesses cum Head of Strategy & Business Support Department of Vietnam International Bank (VIB), shared VIB’s experience regarding its initiatives to pivot to cashless transactions and emphasized benefits to consumers at a conference entitled “Cashless society: policies and realities in Vietnam.”
Ms Tran Thu Huong also underlined VIB’s support for governmental measures to encourage cashless transactions. Speaking on VIB’s own initiatives, Ms Huong asserted that VIB’s strategies of expanding credit card options and digital banking are in line with its goals of anticipating demand and becoming the leading bank in cashless transactions in Vietnam.
VIB’s strategies to anticipate cashless trends in Vietnam
According to Ms Huong, cashless transactions are growing around the world at approximately 13% a year; even faster in Asia, at 30%. Among cashless options, cards still dominate at 67%, followed by mobile payments and internet payments.
Anticipating this trend, VIB has focused on developing its digital payments options through cards and digital banking services, most notably the app MyVIB which allows users to conduct transactions, including interbank transactions and bill payments, immediately 24/7, even during the weekends and holidays. VIB has also developed technologies based on digital banking such as QR code payment and real times card management. This past May, VIB was the first bank in Vietnam to offer digital cards and Green PIN, which allow users to start transacting immediately after being approved, without having to wait for a physical card or a printed PIN code. These technologies shorten the waiting period to begin transacting from five days to 3-5 minutes.
At the same time, VIB is lowering initial barriers against cashless transactions by offering attractive deals, such as a program waiving all online transaction fees unconditionally, up to 50% discount and 0% interest on installments for VIB cardholders. In honor of Cashless Day, VIB is also offering exclusive privileges programs for card users and digital banking customers in June.
Furthermore, to encourage customers to use cashless methods over the long run, VIB is rolling out unique products with long-term practical benefits. Most notably, six new cards have been introduced and have received widespread acclaim: Happy Drive – the only credit card in the market offering up to 500 litres of gasoline per year and cashback 30 percent on car maintenance fee; VIB Financial Free – the 1st credit card with free annual fee and withdrawal up to 100% card limit. Or other credit cards with outstanding benefits such as VIB Cash Back, VIB Rewards Unlimited, VIB Travel Elite with the best refund, reward points, miles and currency exchange transaction fee. The most recent credit card, VIB Zero Interest Rate, waives interest rate for all card expenses during five years. rather than only the usual 45-60 days.
These initiatives have resulted in impressive growths in VIB card users and MyVIB transactions. VIB is one of the leading banks in MasterCard credit card spending with growth rate reaching over 300% compared to 2017, twice the market average. Over the same period, the number of digital transaction users has grown 60%, and the amount of transactions over MyVIB has grown 77%.
Suggestions to expand cashless transactions in Vietnam
At the conference, Ms Huong also suggested ways to accelerate the transition to cashless in Vietnam. According to Ms Huong, two most important factors are supply and demand. Supply comes from the government, which should utilize regulation and executive guidance to ease the way for banks and companies such as Fintech and Bigtech to participate in discussions and offer suggestions moving forward. With clearer regulations and guidance from managing offices, banks and businesses would be more empowered to take initiative. Demand, on the other hand, comes from consumers. Along with banks’ individual efforts to bring cashless options to consumers, the National Bank has been observing the rollout closely and encouraging banks to join in the effort to raise consumer awareness. High consumer awareness means consumers would be more receptive to new cashless solutions.
Efforts to stimulate supply and demand need to happen at the same time. The leadership of the government and the National Bank has had a large impact, pushing banks to develop strategies moving forward to expand cashless transactions in Vietnam.