Along with the development of modern technology and retail sector, cashless payment is widely used in the country with the participations of many players from different sectors including banks, retail companies and cashless payment method providers. Viet Nam News reporter Thu Ngân talks with exclusives from companies to share their view about the development, the trend and the security of cashless payment in Viet Nam in the coming time.
Sanjay Chakrabarty, deputy CEO, head of Retail Banking of Orient Commercial Bank (OCB)
Needless to say, in Viet Nam, the potential of cashless payments is very high. The acceptance of new technology backed by high penetration of smart phones among the young population makes the environment perfect for growth in cashless digital payments.
Cashless payments support financial transactions where we don’t use physical banknotes, but execute the transaction through electronic information transfer. The concept is very simple that way. So, to drive cashless payments, first and foremost, we need technological infrastructure and connectivity, and second, willingness of different parties to enable cashless transactions.
In Viet Nam, both these factors are on the rise. The Government has been extremely supportive of this endeavour. Also, given the penetration of smart phones and high ratio of early adaptors of technology, the private sector clearly recognises the potential of setting up payment platforms. So, it is not a surprise that the investments to enable cashless payments has come from both Government and private sector.
In the past, cashless payments were often associated with credit and debit cards. While the usage of cards has increased significantly over the years and quite a few banks have even launched contactless cards, adding to the convenience of customers, the focus of cashless payments has really moved to digital payments.
Digital payments are getting more and more frictionless.
It is true that the risk of fraud is higher in case of cashless payments. Cashless payments are executed through data transfer and whenever there is a data breach, the risk of fraud increases significantly. We have instances where the even banks, despite all the focus they have to keep their data secure, have been hacked.
However, the good news is Viet Nam has kept apace with developed countries when it comes to security.
There are two particular measures that have a significant impact on security. One, the shift to the chip card from magnetic stripe at the back of the card. The micro-chip makes the card far more secure than the traditional card as the card data stored in the terminal when one uses a chip card cannot be reused for future transactions. For online, now banks are moving to 3D security which means apart from the security code at the back of the card, one will require an OTP to complete the transaction. Both these changes will substantially increase security for financial transactions.
There is no 100 per cent safe payment, it’s always a trade-off; high risk comes with high return, more security comes with less convenience; cashless payment brings more conveniences to the people around the world and its safety depends on many factors such as laws and regulation, cashless payment policy, infrastructure maturity, payment network, and culture.
We can see Viet Nam has been improving those factors significantly in the past few years to make cashless payment more popular and secure, and Vietnamese now can enjoy the great benefits of cashless payment in their daily living, especially in urban areas.
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