Bitcoin development opportunities in Vietnam from the perspective of consumer payment habits

As Asia's leading online retailer, Singapore-based Zalora has operations in Indonesia, Malaysia, Brunei, the Philippines, Thailand, Vietnam, as well as Hong Kong and Taiwan. Consumers place orders and pay for goods online, and cash on delivery (COD) is one of the common payment methods online. This method is very popular in Vietnam, from large e-commerce companies to small retail stores. Most of these companies use professional agent services that can not only deliver products to customers but also collect payments. There are dozens of such service providers across the country, most of which are located in Hanoi, Ho Chi Minh City and Da Nang.

According to Viet Tran Quang, manager of VTC Pay, “More than 90% of payment transactions in Vietnam are in cash, and customers prefer cash on delivery to online payments.” VTC Pay, a subsidiary of the state-owned Vietnam Multimedia Corporation (VTC), processes more than 8 million transactions per day from 21 million active accounts.

World Bank data from 2014 showed that about 31% of Vietnam's population had an account at a bank or financial institution, half the global average of 62%.

Mastercard released its first Safety and Security Index last year, citing two key reasons people rely on cash: "Fear of identity theft and ATM-related fraud are the top two reasons consumers in Southeast Asia and mainland China worry about the security of electronic payments."

Mastercard believes that "these concerns do not stem directly from consumers' personal experiences, but rather from the serious perception of fraud reported in the media."

At an e-payment forum held in Hanoi last month, Deputy Prime Minister Vu Duc Dam said Vietnamese people's reliance on paper money was becoming an obstacle to economic growth. He called for greater cooperation among ministries and departments to reduce people's reliance on cash and create conditions to encourage people to use electronic payment systems.

Vietnamese Deputy Prime Minister Vu Duc Dan said:

"This payment habit has hindered the development of Vietnam's economy and the improvement of people's living standards."

In 2014, the total market value of Vietnam's e-commerce reached US$2.97 billion. This value is expected to reach about US$4 billion in 2015 and US$7 billion in 2017. Despite the significant growth of e-commerce in Vietnam, Vietnamese people still prefer to use cash, and this "payment habit" of using cash accounts for 65% of total payment transactions.

Vu Duc Dan also highlighted that in other countries, electronic payments are as high as 90%. Vietnam has more than 120 million mobile phone users and more than 4 billion Internet users, which provides huge growth opportunities for electronic transactions.

Viet Tran Quang, General Manager of VTC Pay said:

“However, the ongoing changes in consumer payment behavior in Vietnam and recent government policies to encourage non-cash transactions have stimulated the development of electronic payment service providers.”

In this context, Vietnam’s Bitcoin community also saw an opportunity. Last September, Bitcoin Vietnam announced the relaunch of VBTC, Vietnam’s first Bitcoin trading platform. It also announced a partnership with New York-based Bitcoin remittance technology provider BlinkTrade.

The relaunched VBTC has undergone major changes in services, the most notable of which is that it allows users to deposit cash into the platform's accounts or withdraw funds from the platform from 9,200 bank outlets in Vietnam without the need for a bank account.

Dominic Weir, co-founder of Bitcoin Vietnam, said: "These bank points are all commercial bank branches in Vietnam. The system we are using, translated into English, means something like "cash to ID". All we need is the customer's ID data, the remittance is sent to the selected bank branch, and then it can be withdrawn on the client side. So no bank account is required."

Bitcoin Vietnam recently formed a partnership with digital currency payment processor Coinify. Nguyen Tran Bao Phuong, CEO of Bitcoin Vietnam, said:

“This collaboration, which provides Vietnamese merchants with the option to receive blockchain remittances, will improve the lack of trust and security surrounding traditional payment methods like credit cards, Paypal and similar products.”

In the first phase of this new partnership, Vietnamese merchants will be able to accept Bitcoin and 16 other blockchain currency payment options supported by Coinify. The two companies’ cooperation announcement said: “These payments will be automatically converted to Vietnamese Dong and paid out regularly. As a result, merchants can provide their consumers with more payment options while avoiding risks such as fraud.

The newly created platform will provide integration for merchant websites and online stores through a custom API or universal plug-in, and a point-of-sale (POS) application tailored specifically for physical stores. It is estimated that by the end of 2015, there will be about 250,000 POS terminals in Vietnam, serving more than 900 million people, so a POS application tailored for physical stores will create lucrative returns.

Nguyen Tran Bao Phuong believes that international cooperation and exchanges will play a huge role. "It will promote the growth and prosperity of domestic industries along this path, thus paving the way for Vietnam's economy to further integrate with the international community."

“We believe it is essential to provide Vietnamese merchants with this best-in-class payment solution, which will provide them with a more secure way to receive payments and help merchants truly open their services to consumers around the world.”

Original article: http://bravenewcoin.com/news/vietnams-cash-habit-hampering-economic-growth-claims-deputy-prime-minister/
By B Holmes
Translator: printemps
Editor: printemps
Source (translation): Babbitt Information (http://www.8btc.com/vietnam-cash-bitcoin ‎)