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Noncash payments for public services remain unpopular
By Van Ly
Friday,  Aug 24, 2018,20:41 (GMT+7)

Noncash payments for public services remain unpopular

By Van Ly

Noncash payments remain unpopular in Vietnam, especially in rural and remote areas - PHOTO: TL

HANOI – A scheme to promote payments for public services through banks, including taxes, electricity and water bills, tuition fees, hospital bills and other social insurance programs, has yet to be executed on a large scale, despite being approved in February.

At a seminar on noncash payments for public services, held in Hanoi today, August 24, Nguyen Kim Anh, deputy governor of the State Bank of Vietnam (SBV), said the scheme is aimed at developing the e-Goverment and enhancing the use of banking services, especially noncash payments.

Under the scheme, 80% of taxes and 70% of electricity bills in cities are expected to be paid through banks by 2020. Besides this, 50% of households in large cities are expected to make noncash payments for water bills, while 80% of students in universities and colleges will most likely pay their tuition fees through banks.

The scheme also targets having 50% of hospitals in major cities accept noncash payments for healthcare services.

The relevant ministries, agencies and localities have proactively rolled out the scheme, and some have even issued detailed plans to execute it.


Bui Si Loi, deputy head of the Committee for Social Affairs of the National Assembly, said the promotion of noncash payments is indispensable within the context of the Fourth Industrial Revolution. Payments for public services through banks will benefit consumers, banks and public service providers, he added. 

This mode of payment can help reduce the costs of money issuance and circulation, such as printing, counting and transportation. In addition, the time for money flows will be shortened, raising the efficiency of capital use and improving the competitiveness of the local economy.

The noncash payment model will also strengthen the establishment of innovative startups in the payment sector, creating more jobs for local laborers, and will enhance the efficiency of tax collection and management, thus attracting more foreign direct investment.

The State management agencies are expected to easily control the financial transactions of public service providers. The costs for fee collection facilities and staff, together with the time typically spent on administrative procedures, will be saved as well.

As for banks, the noncash payment mode will help them diversify their banking products, expand their markets and attract more customers, thus mobilizing more capital.


At the seminar, Pham Tien Dung, director of SBV’s Payment Department, said 50 banks have cooperated with the customs agencies to collect taxes online, while 26 banks have provided the electricity fee collection service for power companies. Banks have also supported the collection of payments for water bills, tuition and healthcare fees, as well as pension and social insurance payments.

Regarding the shortcomings of the noncash payment model, Dung said the model remains unfamiliar to people in remote areas. According to him, banks and the providers of public services find it challenging to connect with each other and share information on transactions.

He attributed these flaws to the banks’ unreasonable policies and underdeveloped infrastructure for payment services, especially in rural and remote areas.

The director also pointed out some objective reasons for the resistance to the new system, such as local consumers’ habit of making cash payments and their fear of change. He added that local consumers do not prefer noncash payments due to the high fee charged.


Dung proposed improving the legal framework and policies for payments through banks to ensure the safety of these transactions, launching more modern noncash payment modes that are suited to each public service and improving the coordination between public service providers and banks.

According to Nguyen Quoc Dung, sales manager of the Vietnam Electricity Group (EVN), the group has cooperated with 27 banks and 10 intermediaries to collect payments for electricity bills.

However, the number of transaction points provided by banks in rural areas is limited, resulting in difficulties for the local people in paying their electricity bills. Additionally, banks often operate during office hours, when the average consumer needs to be at work.

EVN suggested appointing an agency to formulate online payment policies.

Meanwhile, banks should apply advanced technologies to their products to better meet customers’ demands and to ensure the safety of their payment systems, Loi was quoted by Lao Dong newspaper as saying.

The banking sector needs to frequently review and amend regulations on noncash payments and the security of information technology systems of public service providers, he added.

The deputy head also called for public awareness of the noncash payment model and close cooperation between the relevant ministries, agencies and localities.

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