The Breakthrough of non-cash payments in the public sector

	Creating an ecosystem for non-cash payments
	“A kick” to facilitate customers in revenue collection
	State Treasury promotes the implementation of non-cash payments

Credit institutions and payment intermediaries have focused on strongly developing the digital ecosystem with new, safe and convenient products, services and payment methods. Photo: TL

Impressive growth

Information about the results of non-cash payment development in the public sector, Mr. Pham Anh Tuan, Director of Payment Department, State Bank of Vietnam (SBV) said that in recent times, the legal corridor and mechanism of non-cash payment policies are constantly being improved. Along with that, credit institutions and payment intermediaries have focused on strongly developing the digital ecosystem with new, safe and convenient products, services and payment methods, bringing practical benefits to people, businesses. Many new services and payment methods such as opening an account, opening a card with eKYC, payment, money transfer, ATM withdrawal with QR code, contactless chip card payment, anthropometric payment authentication, card information encryption, etc are developed. These factors have created the foundation for "accelerated" non-cash payments in the government and public administration sectors.

As prominent as state budget collection in the field of Customs, the rate of collection through commercial banks coordinating collection and the State Treasury increased from 53% in 2014 to 99.8% in 2022.

Education, healthcare, electricity, water, pension payments, social insurance benefits, unemployment benefits, etc also recorded strong growth in non-cash payments. Specifically, 100% of higher education institutions in urban areas accept tuition payment through the banking system; Most preschool and general education establishments are equipped with non-cash payment facilities, notify and encourage students and their families to pay tuition using non-cash payment methods.

In the health sector, nearly 88% of hospitals under the Ministry and universities of Medicine and Pharmacy have implemented non-cash payments; About 63.8% of localities - Department of Health (30/47 reported) have a number of medical examination and treatment facilities that have implemented non-cash payments, reaching a rate of 50% or more, including 12/47 (25.5%) health departments achieved a rate of 100% medical examination and treatment facilities implementing non-cash payments.

Mr. Dang Anh Long, Head of Finance and Accounting Division, Ho Chi Minh City University of Medicine and Pharmacy Hospital, said that in the last 5 years, the proportion of non-cash payments at Ho Chi Minh City University of Medicine and Pharmacy Hospital has continuously increased. In the first 9 months of 2023, non-cash payments accounted for 50% of the hospital's total revenue.

Mr. Nguyen Nguyen Phuong, Deputy Director of Ho Chi Minh City Department of Industry and Trade also said that Ho Chi Minh City has great potential in the field of commerce with 3 wholesale markets, 222 traditional markets, 237 supermarkets, 48 commercial centers, thousands of convenience stores. These establishments all participate in non-cash payment activities, helping to bring impressive results in non-cash payments in the area. However, there is still great room to develop non-cash payment in the commercial sector in Ho Chi Minh City.

Benefits for all parties

Talking about the benefits that non-cash payments bring about, Mr. Le Hoai Nam, Deputy Director of Ho Chi Minh City Department of Education and Training, said that the biggest beneficiaries are the parents of students. When paying fees and tuition by non-cash payment, parents can sit at home to pay by mobile phone or computer through services provided by banks and payment intermediaries. Parents no longer have to line up to pay tuition in cash like before, saving a lot of time and effort.

In addition, non-cash tuition payments also help schools manage financial revenues. From the headmasters to higher levels like the education division and the department of education and training can grasp financial information at schools. The revenue and expenditure process of schools becomes more transparent and modern.

Mr. Tran Viet Huy, Head of Customs and Trade Facilitation, Vietnam Logistics Service Business Association also assessed that non-cash payment brings benefits to both service users and service providers. Specifically, typically for each import-export shipment, businesses will have to interact with 3-5 related units, most of which are public services such as Customs, port businesses, shipping lines and state management agencies on quality. Previously, businesses paid fees in the form of bank transfer. If businesses transfer money with errors, they will have to conduct a search and wait 2-3 days, or even weeks, before receiving a refund. Therefore, businesses will normally have to advance another amount of money to be able to clear customs for the shipment. But since connecting non-cash payments with level 4 national public services, the above errors no longer occur.

From the perspective of a payment service provider, a representative of BIDV Bank acknowledged that implementing non-cash payment services in the public sector not only saves the state budget, saves time, effort for people and businesses, but also contributes to preventing corruption by limiting direct contact and transactions between civil servants and customs declarants.

A representative of MSB Bank also shared that in the first 6 months of the year, the rate of new individual customer development on the bank's digital channel reached 79%, an increase of 22 percentage points compared to the end of 2022. The quantity and total transaction value on internet banking and mobile banking channels reached 47.5 million transactions and 578,000 billion VND, respectively. The number of new individual customers and SMEs using the eKYC channel increased by 311% and 43% compared to the same period in 2022. Overall, MSB is currently serving over 4.5 million individual customers and nearly 72,000 business customers.

Although there are many benefits, in reality many users are still concerned about risks when making non-cash payments. According to experts, this factor will affect the behavior of using non-cash services. To overcome this problem, Mr. Nguyen Duc Dung, Director of HDBank Digital Transformation Center, said that it is necessary to promote communication and financial training so that people understand the convenience, ease, time and cost savings of non-cash payments. At the same time, the legal framework for non-cash payments must also be completed and developed, creating trust for payment service providers and users.