Hanoi (VNA) - The Prime Minister recently ratified a project tostimulate non-cash transactions in 2016-20 with a view to reducing the cashtransactions rate to under 10 percent.

The project aims to accelerate e-commerce andimplement the Master Scheme on E-commerce Development.

All supermarkets and modern distribution centreswill take part in e-commerce while 70 percent of water, electricity, telecompayments will be in non-cash mode. Half of all individuals and households willswitch to non-cash transactions.

New, modern means of payments will be developedin rural and remote areas, financial inclusion will be targeted and at least 70percent of people aged over 15 will have bank accounts by 2020.

These targets were outlined based on encouragingachievements in the last six years, which have gradually made non-cash paymentsa trend in Vietnam.

Cash payments as a ratio of total payments havedeclined from 14.02 percent in 2010 to 12 percent now.

According to a State Bank of Vietnam reportreleased recently, there are currently around 67.4 million bank accountscompared to 16.8 million in 2010.

Modern infrastructure and technology tofacilitate non-cash payments, especially online payments, have developedsignificantly. The number of bank cards has increased to around 111 millionnow.

There are around 254,000 points of sales (POS)and 17,380 automatic teller machines (ATMs), up 13.77 percent and 5.39 percentsince the end of 2015.

The central bank has also rolled out policiesrelated to modern infrastructure and technology to boost non-cash payments,protect customers’interest and ensure service quality.

It has instructed banks to quickly convert allmagnetic cards into chip cards to prevent fraud. It wants all ATM cards tobecome EMV-standard chip cards by 2020 to reduce the risks involved ine-commerce for both buyers and sellers.

But analysts, while not denying the recentaccomplishments, still have doubts about the cash-use target.

They said cash was used in nearly 90 percent ofall transactions, and there were only three years left to reduce that to below10 percent.

The biggest hindrance to achieving the target isthe people’s cash habit, with not only individuals but even businesses yet toget used to non-cash transactions.

For instance, the facility to pay taxes onlinehas been in place since 2014 and 95 percent of all enterprises have registeredfor it, but many do not use it.

Besides, this remains an alien concept to themillions of business households and private individuals.   

Although e-commerce has developed rapidly in Vietnam,a majority of buyers still opt for cash on delivery (COD).

According to the Department of E-commerce andInformation Technology, many still prefer COD partly due to their habit andpartly because they do not fully trust e-commerce websites.

Only around 4.5 million people have applied fore-payment of electricity bills, a mere 18.47 percent of the total number ofusers in the country, according to the Electricity of Vietnam (EVN) group.

Banking insiders said most supermarkets,commercial centres and other modern retail sites accepted cards.

Meanwhile, by October last year, 90 percent ofurban people possessed cards, with the total number of cards reaching 110.8million.

But the number of users was very modest at just15 percent .

One of the reasons is that though a huge numberof cards have been issued, the location of ATMs is skewed in favour of majorcities while 70 percent of the country’s population lives in rural areas.

Another reason is the lack of security, whichmakes people apprehensive about non-cash payment methods.

A spokesperson for the Commerce DevelopmentResearch Institute pointed out that the habit of cash payment remainswidespread, especially in rural areas.

Besides, the interest rate and fees on credit oncredit cards are astronomical, which also makes people reluctant to use them.

To ensure that the PM’s non-cash payment plancan be achieved on schedule, all these problems must be resolved immediately,analysts said.-VNA