Vietnam’s one of the world’s most cash-dependent economies, with more than 90% of transactions done in cash.
This is because many Vietnamese people don’t trust the banks due to corruption and fraud. They would rather risk robbery than have their credit card information stolen.
Alibaba Chairman Jack Ma’s Thoughts on Economy
Jack Ma is invested in helping Vietnam’s economy.
At Hanoi’s Electronic Payment Forum, he said Vietnam’s cash dependency hurts its economy. He added that digital payments offer security and convenience for business transactions.
'Like it or not, the world is moving to a non cash payment era.'
In 2016, he helped form the Vietnam Export Support Alliance. This partnership offers a package for Vietnamese businesses, helping them seek financial assurance.The Vietnam Export Support Alliance can also grant export-import insurance as well.
Vietnam’s Deputy Prime Minister Vương Đình Huệ agrees with Ma, adding that digital payment has helped many countries’ economies.
The Vietnamese government is aiming to lower cash transactions to under 10% by 2020. They plan to do this by installing 300,000 point-of-sale (POS) systems by 2020. This will improve accessibility for those who are far from a bank in Vietnam. They also want to attract foreign business with digital payment. This will include working with businesses to fix Vietnam’s trade barriers.
3 Ways This Affects Your Business
Vietnam is moving away from its cash economy. This benefits your business for a few reasons.
Welcome to the Global Market
Vietnamese businesses used to send B2B payments in cash, which limited their market reach. With Vietnam’s new digital-payment focus, businesses will be entering the global market for the first time.
Vietnam is the second fastest-growing Asian country besides China since 1986. The Vietnamese government is targeting 7% GDP growth by 2020.
US businesses can benefit from Vietnam entering the global market. Vietnam is becoming more and more of an ideal business partner, with its improved technology and cheap labor. Plus, its dedication to foreign business shows Vietnam’s interest in ecommerce and international trade.
Safe and Secure
When society is a cashless society, everything is digitalized, everything is transparent,
You can use payment security as a bargaining chip in Vietnamese business negotiations. Payment platforms like Veem can track B2B payments, ensuring transparency. Veem also avoids banks, which could be an added bonus for Vietnamese businesses.
Secure B2B transactions will improve your business negotiations with Vietnamese businesses.
Eyes on Ecommerce
Vietnam’s committed to improving its ecommerce. The government vows to provide a national foundation for ecommerce growth by 2020.
More than 75% of Vietnam’s ecommerce sales comes from Hanoi and Ho Chi Minh City. Connecting Vietnam’s smaller cities to the ecommerce network is a way to introduce them to the global market.