Digital banks are teaming up to accelerate the use of credit cards with cutting-edge technology in Vietnam.
According to National Payment Corporation of Vietnam (NAPAS), 11 banks and four financial companies are engaged in the issuance of domestic credit cards. As of August, the number of domestic credit cards in circulation in Vietnam stood at roughly 800,000, an increase of 42 per cent on-year.
Pham Anh Tuan, director general of the State Bank of Vietnam's (SBV) Payment Department, pointed out that the number of domestic credit cards issued in Vietnam has achieved an average growth rate of 29.6 per cent per year over the 2018-2022 period.
"This figure is higher than that of international credit cards, at 17.72 per cent annually. The increase is attributed to the expansion of credit card issuers, especially digital banks. Such efforts have contributed to the development of cashless payments and promoted financial inclusion in Vietnam," Tuan said.
In the same vein, Le Anh Dung, deputy director of the Payment Department said, "Many digital banks and financial institutions are applying a range of modern payment options for credit cards by using a contactless chip and a QR code. Alongside the traditional methods, they have implemented electronic know your customer solutions for card issuance. Thus, customers can sign up for accounts from anywhere within just a few minutes."
According to global market research company Euromonitor International, domestic credit cards are anticipated to become the new payment trend among Vietnamese people thanks to the support being offered to local card issuers, which should contribute to the shift towards cashless payments over the coming years. The potential for the development of domestic credit cards is not limited to urban locations. It is also evident in rural areas, where providers are targeting the lower-income segment.
NAPAS is expected to become the leading credit card operator in the near future, not only for personal cards but also for commercial versions. This will be supported by the government through the continuous improvement of its network and services, along with cheaper fees. Such cards are also accepted in a growing number of Southeast Asian territories.
Meanwhile, the global payment technology company Visa is also teaming up with other partners to increase credit card adoption in Vietnam. Most recently, it has partnered with Cake by VPBank digital bank to launch the Cake Freedom credit card with a 20 per cent cashback promotion across the five most popular categories, namely e-commerce, food and beverages, delivery and transportation, supermarkets, and convenience stores.
Dung Dang, Visa's country manager for Vietnam and Laos said, “According to the Visa Consumer Payment Attitudes Study 2022, with 90 per cent of Vietnamese consumers showing a keen interest in virtual banking, our partnership with Cake comes at a pivotal moment. Utilising Visa Consulting and Analytics, Cake successfully developed a product that meets the evolving needs of our tech-savvy consumers."
"As Visa continues to pioneer secure and seamless payment experiences, we are dedicated to collaborating closely with our partners to ensure that our solutions in Vietnam align with the changing demands and expectations of our consumers,” she added.
Nguyen Huu Quang, CEO of Cake by VPBank stated, "Cake digital bank currently has over 3.8 million customers. It is a great resource for us to conduct in-depth research on customer behaviour, allowing us to better understand and serve clients."
"With the Cake Freedom credit card, we hope to bring increased financial freedom. Cake's ambition is to eliminate all barriers, so everyone can enjoy comprehensive digital services in the most convenient and secure way," Quang continued.
According to government statistics, Vietnam is in a golden age, with online payments being particularly attractive to the younger population. The nation's 22.1 million teenagers offer significant potential for the expansion of virtual credit card services.
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