How do payments in Vietnam affect your life and spending?

Vietnam's payment system has developed rapidly in recent years, and the popularity of mobile payments and e-wallets, in particular, is profoundly changing the way locals live and spend their money. The impact is analysed below in several key aspects:

1. Significant reduction in cash dependency

• urban phenomenon: Convenience shops, cafes and even street vendors in major cities such as Ho Chi Minh City and Hanoi commonly accept electronic payments such as MoMo and ZaloPay, and young people basically go out without cash.
• Rural penetration:: Government-promoted "cashless village" projects (e.g., piloted in Quang Nam Province) incentivise farmers to use QR codes for cash collection through subsidies, but older people still trust cash more.

2. Reconfiguration of consumption scenarios

• Super App Ecology: Platforms such as GrabPay, which integrates taxi, takeaway, and bill payment into a single portal, have been shown by 2022 data to have an average user open frequency three times higher than that of payment-only apps.
• Social e-commerce explodes: Facebook Live sells goods via VNPAY Instant Transfer to complete the transaction, and 62% of social e-commerce GMV in 2023 via e-payments.

3. Financial Inclusion Breakthrough

• Filling the credit gap: Institutions such as Vietcombank have begun to issue small loans based on MoMo's water flow data, with interest rates 40% lower than traditional private lending.
• Cross-border pain points: The active Saigon Bitcoin OTC market ($2 million daily) reflects the inadequacy of formal cross-border payments and grey alternatives.

4. Policy and Technology Gaming

• regulatory lag: The National Bank did not require e-wallets to be tied to a bank account until 2023 (prior to that 70% was not real-name).
• technology adaptation: Vietnam's speciality 'SIM Pay' - transferring money from feature phones via USSD codes - covers the market gap of only 65% in smartphone penetration.

5. Clash of cultural practices

5. Conflict of cultural practices

Payment changes in Vietnam have not been smooth, as the collision between traditional consumer culture and digital finance continues:

• Resistance to electronic red packets::
  Vietnamese people have traditionally favoured cash red envelopes (Lì xì), especially on Lunar New Year and wedding occasions. Despite the launch of MoMo's "electronic red packet" function, the 2024 survey showed that 78% of middle-aged and elderly people still believe that "money that cannot be touched has no meaning as a blessing".

• The digital dilemma of tipping culture::
  In restaurants and hotels, where consumers are accustomed to using cash to express their gratitude, Grab drivers generally complained that "tips were reduced by 30% after e-payment", and some passengers gave up rewarding due to the cumbersome process of transferring money.

6. Digital transformation of the underground economy

The popularity of mobile payments has also given an unintended boost to the "onlineisation" of the informal economy:

• Tax avoidance for street vendors::
  Many food stall owners use personal QR codes to receive payments (rather than public accounts), and a spot check by the Hanoi Tax Department 2023 found that 85% of small merchants had not declared their mobile payment revenues. The government is piloting the mandatory generation of commercial QR codes containing tax codes.

• Increased invisibility of the grey industry::
  Online gambling and private lottery are transacted through Zalo groups, using VNPAY's 'Instant Payment + Delete Record' feature to avoid tracking. The anti-money laundering agency reported a year-on-year growth of 2,10% in such transactions in 2023.

7. Increasing digital divide between urban and rural areas

Despite a thriving urban payments ecosystem, rural areas still face structural barriers:

case (law): Mekong Delta fishermen are being charged up to TP3T in fees for converting Mobile Money balances into cash through intermediaries.

8. Permanent changes after COVID

The epidemic has become a catalyst for a cashless society:

• Exposure to fear-driven change::
  During the blockade in 2021, contactless payments in Ho Chi Minh City surged by 4,701 TP3T, and even after the blockade was lifted, 631 TP3T of users said they "will not use cash more often".

• Digital Survival for Micro and Small Businesses::
  Street-side Pho shop owners sustain their business through Facebook Live + MoMo collections - a model with a retention rate of 451 TP3T (compared to a purely offline closure rate of 371 TP3T).

Future challenges and trends

1. The rise of biopayments : VPBank has piloted fingerprint/face recognition for payment at petrol pumps.
2. cross-border interconnection : Pilot implementation of Yunnan Health Code and ViettelPay interoperability for shopping and settlement at the China-Vietnam border.
3. tighten supervision : The proposed Non-Cash Law may require that all transactions exceeding 5 million rupiah (approximately $200) be electronically traced.

Vietnam is undergoing a painful transition from a "banknote culture" to a "code-sweeping society" - a change that is not only a technological upgrade, but also a restructuring of the lifestyles of 80 million people. (Data as of 2024Q2)