Only large enterprises "involved deeply" with non-cash payments

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Selling goods via POS will help business units be transparent with cash flow, thus easily accessing the bank's credit sources.

Recently, Vinmart retail system of Vingroup has launched Scan & Go shopping application with many modern shopping features, bringing new experiences to users. According to representatives of Vingroup, using this application aims to help consumers become familiar with the trend of non-cash payment through activating e-wallet on VinID application or using a bank card quickly and securely. E-wallet on the application helps users shop with a single entry of information, not through intermediaries or service fees. Specifically, customers just need to open the VinID application, select Scan & Go, scan QR code of products which they want to but at "VinMart 4.0" and pay immediately with VinID application. After that, VinMart will deliver goods to buyers only after 2-4 hours.

Previously, many large retail systems such as Co.op Mart, Lotte Mart and BigC also cooperated with major banks to issue co-branded cards. Large supermarket systems also accept many modern payment methods such as card swipe, electronic wallet and non-contact payment. Supermarkets also regularly hold promotions, discounts, giving points, giving gifts and refunds to customers to encourage users to use non-cash payment.

However, non-cash payments only develop well at retail systems, enterprises and service providers with large scale. In most small-scale business locations such as clothing shops, grocery stores, or small restaurants, modern payment methods have not covered yet. According to reporters, the cost is still a barrier that makes many businesses hesitate to approach modern payment methods. Specifically, when installing POS, with each payment transaction via POS, stores will have to pay a banking fee of about 0.5% for ATM cards and 1.8% for Visa, and Mastercard. For international payment cards, the fee will be higher, up to more than 3%.

Also, some trading points have stopped using the service after a period of POS installation, some stores require customers to pay fees when paying via POS. According to some businesses, competition is increasingly fierce in the market, having to pay more fees for transactions via POS will reduce the profit rate, causing difficulties for business establishments.

For the benefits of enterprises when applying non-cash payment methods, Le Thi Diem Phuong, Director of VPBank's small and medium enterprises division, said when selling goods via POS, cash flow of enterprises would be very transparent. On that basis, VPBank can issue unsecured credits to finance business units accepting cards. Along with that, business units also do not have to manage because the money paid via POS will automatically be transferred to the account.

Banks also said that with POS machines, enterprises will sell more goods because consumers do not need to have money available, they can also buy by credit cards and debit cards. Besides, many promotions which are deployed by banks with various forms such as discounts, refunds and prizes will also encourage customers to spend more.

According to the SBV, the number and value of card transactions have increased in recent years. By the end of March 2019, the number of domestic payment transactions via bank cards exceeded 65 million transactions, an increase of more than 18% compared to the same period of 2018 with a total value of transactions of more than 171,000 billion VND, up nearly 19%. For electronic payment via the internet, mobile phones, although the absolute number was not large, the growth rate was very strong. In particular, up to March 31, 2019, there were more than 101 million transactions via the internet worth about 4,581 billion VND, growing by 66% in quantity and 13% in value. Transactions via mobile phones also reached 76 million transactions with over 924 billion VND, up 98% and 232% respectively over the same period last year.

Financial and banking expert Bui Quang Tin also said that the actual fee was about 1.8% that banks collect just enough for banks to return to Visa and Mastercard issuers. Therefore, banks could not reduce this fee for business units that installed POS machines. Instead, to encourage POS installation of the business units and help non-cash payments "creep" into every business establishments from big to small, Tin said banks could offer incentives, reduce annual fees, transfer fees or offer preferential service packages for these units. In addition, banks should explain clearly to business units to help them understand the benefits they would bring.