KTFA (Samson)

BWS: Thank you Samson! I’m seeing some of the same factors as we saw happen in Iraq! Growing economy, building an electronic bridge to the west… Good stuff!

Samson: Vietnam : Inter-bank e-payment turnover hits $3.2 trillion in 2018

10th January, 2019

Việt Nam had 18,173 ATMs by the end of September 2018

Inter-bank electronic payment turnover accelerated to VNĐ73 quadrillion (US$3.2 trillion) in 2018, equal to 13 times the country’s GDP, according to Phạm Tiến Dũng, director of the State Bank of Việt Nam (SBV)’s Payment Department.

On average, the inter-bank system handled more than 544,000 transactions worth more than VNĐ289 trillion per day, up 25 per cent and 24 per cent respectively compared to 2017.
Dũng attributed the rise to improvements in the country’s non-cash payment infrastructure, which have helped the payments run smoothly and safely.

Banks have also invested significantly in upgrading their automatic teller machine (ATM) and point of sale (POS) networks over the past year. By the end of September last year, there were 18,173 ATMs and 294,500 POSs nationwide, up 4.5 per cent and 13 per cent over the same period in 2017.

According to Dũng, the automatic clearing house (ACH) for retail payment transactions is also in the final testing stage before being put into operation this year.

Dũng said bank cards have become popular with local consumers. By the end of September, the number of domestic payment transactions using cards reached nearly 167 million transactions worth VNĐ442 trillion, up 21 per cent compared to the same period in 2017.

The central bank said increasing the rate of non-cash payment would be one of its top priorities in 2019, adding that it would continue fine-tuning the legal framework to limit cash payments in the country in line with international rules.

Prime Minister Nguyễn Xuân Phúc has directed the banking sector to take the lead in the Fourth Industrial Revolution by embracing e-payment in 2019, a move that would boost the whole economy.

To boost non-cash payment, the Prime Minister has also approved a decision that aims to bring the ratio of cash to total payment instruments to less than 10 per cent by the end of 2020.

Under the decision, e-commerce will be promoted and all supermarkets, shopping malls and distribution centres will be modernised with card readers by 2020.

By 2020, 70 per cent of electricity, water, telecommunications and communications service providers must also accept non-cash payments of charges, while 50 per cent of individuals and households in major cities will use cashless payment instruments for their shopping and consumption activities.

The percentage of people more than 15 years old holding a bank account will also be increased to at least 70 per cent by the end of 2020.   LINK

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Samson:  Vietnam’s PM asks ministry to speed up reforms

10th January, 2019

Prime Minister Nguyễn Xuân Phúc speaks at the the Ministry of Finance conference on Wednesday

Prime Minister Nguyễn Xuân Phúc asked the Ministry of Finance to hasten administrative reforms and improve transparency to create favourable conditions for business development.

PM Phúc spoke at the ministry’s conference on Wednesday about implementing tasks for 2019 to ensure the stability of policies, simplify tax and customs procedures, and reduce informal charges. The ministry’s policies must focus on promoting the development of small- and medium-sized enterprises, PM Phúc said. Minister of Finance Đinh Tiến Dũng said the focus would be on hastening administrative reforms, especially in tax and customs procedures, to improve the business climate.

The ministry’s report showed that it abolished 18 administrative procedures in 2018 but nearly 150 others needed to be reviewed for removal. Some 111 administrative procedures were simplified and 117 out of 190 business prerequisites were simplified or removed. In 2019, the ministry plans to study amendments to tax policies with the goal of expanding tax bases and preventing transfer pricing.

Dũng said the ministry would step up prevention of trade frauds and tax evasion, and address tax arrears to increase budget revenue. The ministry’s report showed budget revenue in 2018 was more than VNĐ1.4 quadrillion (US$61.8 billion), 7.8 per cent higher than the target for the year.

The increase in budget revenue gave Việt Nam more resources to handle urgent tasks in socio-economic infrastructure development investment and deal with natural disasters, Dũng said. The ministry set a budget revenue target for 2019 that is 5 per cent higher than the target of VNĐ1.41 quadrillion set by the National Assembly.

Regarding budget spending, the ministry tightened public procurements and recurrent spending but increased spending for development investment. Statistics showed development investments accounted for more than 27 per cent of the total budget spending. The budget deficit was estimated at less than 3.6 per cent of gross domestic product (GDP) and public debts were less than 61 per cent of GDP, 0.3 percentage points lower than in 2017. This was the second year Việt Nam saw a decrease in the ratio of public debt to GDP after reaching a six-year high of 63.7 per cent in 2016.

Public debts were restructured to ensure sustainability and solvency with Government bond yields averaging 4.67 per cent per year, 1.31 percentage points lower than in 2017. Investors of Government bonds were diversified with the holdings of commercial banks dropping from 78 per cent in 2016 to 53.1 per cent. However, the disbursement of public investment for capital construction remained low, Dũng said, citing that it met only 67.6 per cent of the plan.

Dũng said the ministry would increase the disbursement of public investment but also enhance supervision to increase its efficiency and prevent losses and waste. The restructuring and divestment of State-owned enterprises would also be hastened, he said. Bùi Văn Nam, general director of the General Department of Vietnam Taxation, said the application of electronic invoices would be expanded nationwide.   LINK

Samson:  Vietnam : Central bank issues roadmap for ATM card upgrades

8th January, 2019

All ATM cards in Việt Nam will be EMV chip cards by the end of 2021

Under a new regulation, commercial banks will have to switch 30 per cent of their current magnetic strip ATM cards – more than 25 million in total – to chip cards by the end of this year to enhance safety and service quality.

Under Circular 41/2018/TT-NHNN, which will replace Circular 19/2016 as the regulation on bank card operations starting on February 18 this year, commercial banks must increase the ratio of chip cards to at least 60 per cent by 2020. This means at least 51 million cards will use chip technology. The regulation will ensure the country has completely switched to chip cards by the end of 2021.

The new regulation also stipulates card payment institutions must ensure that at least 35 per cent of their ATMs and 50 per cent of their points of sale (POS) accept chip cards by the end of this year. The ratios are required to increase to 100 per cent by the end of 2020.
During the transition period, institutions must ensure all their ATM operations run smoothly, stably and safely to protect the interests of cardholders.

Under the new circular, SBV also requires all domestic chip cards must meet standards issued by the bank in October last year. The cards must be compatible with EMV standards as well as the standards of international card organisations such as Visa, MasterCard, JCB and UnionPay.

Statistics from SBV showed that as of September 2018, the country was home to more than 18,170 ATMs and 294,500 POS machines, serving over 85 million ATM cards with magnetic strips. These old-style cards can be easily hacked due to weak security features.

International card-issuing organisations have asked Vietnamese banks to switch to chip cards that meet EMV standards to increase safety amidst a growing number of information thefts. Security experts have also warned Việt Nam’s delayed transition to chip technology could put the country at risk of becoming a ‘haven’ for card criminals from around the world as it is among the dwindling number of countries where the use of magnetic swipe cards is still prevalent.

Commercial banks are in the process of switching over to the new cards because of their stronger security features. However, some banks say the switch faces multiple barriers. They will have to upgrade their technology and replace ATMs and POS terminals with newer ones that are compatible with chip cards.

According to banks, issuing a chip card can cost some US$1.50-2.50, meaning they will have to spend between $105 million and $175 million for the transition, in addition to the cost of upgrading ATMs and core banking systems to adapt to the change.   LINK

Samson:  Digital banking essential for Việt Nam’s financial sector

11th January,2019

Customers use the Viettel Pay app to pay for goods. The development of mobile internet banking, QR code payment systems and biometric fingerprint and iris scanning has helped improve the quality of banking services

Embracing the digital transformation is critical for Vietnamese bankers in the era of Industry 4.0, experts said during the 2019 Asian Banker Conference in Hà Nội on Thursday.

The event, themed ‘Future of Finance Việt Nam’, was organised by Singapore-based The Asian Banker, a provider of strategic business intelligence to the region’s financial services community.

The event brought financial institutions, regulators, policymakers and service providers together to share professional insights, work on detailed solutions and discuss the latest trends in the banking industry.

“We are living in an era of technological revolution which brings both new opportunities and challenges,” said Huỳnh Bửu Quang, CEO of the Việt Nam Maritime Commercial Joint Stock Bank (Maritime Bank). “Currently, 59 per cent of Vietnamese people have bank accounts, 67 per cent use the internet and 70 per cent use smart phones, but less than 20 per cent make online banking transactions and digital payments.” “This presents a huge opportunity for bankers to apply digital technology to bring new and convenient products and services to customers,” Quang said.

According to Nghiêm Thanh Sơn, senior deputy director general of the State Bank of Việt Nam (SBV)’s Payment System Department, there is significant potential to apply digital technology to increase the efficiency and quality of services in the country’s banking industry. These opportunities are provided by the country’s good technical infrastructure and streamlined policies.

The SBV pays special attention to fine-tuning legal frameworks and promulgating regulations to enhance the development of information technology infrastructure and security for the banking industry, Sơn said.

Following the trend, many banks have been embarking on the application of Industry 4.0 technology and the modernisation of their business models, said Nguyễn Toàn Thắng, Secretary General of the Việt Nam Banks Association.

The development of mobile internet banking, QR code payment systems and biometric fingerprint and iris scanning has helped improve the quality of banking services and promises to lead to sustainable growth thanks to increased services revenue and a gradual reduction of dependence on lending, Thắng said.

Vladislav Solodkiy, Managing Partner of Life.SREDA and CEO and Founder of Arival Bank, told the conference that in Sweden, the government prohibits cash banking transactions to force the banking system to urgently prepare digital infrastructure.

Cấn Văn Lực, chief economist of the Bank for Investment and Development of Việt Nam, told Việt Nam News that in 2017, Việt Nam’s Government triggered a move towards a cashless society by 2020, with a focus on the development of digital payments.

“In the first quarter of 2018, internet payments increased by 33 per cent in volume and 18 per cent in value, while mobile payments were up 29 per cent in volume and 128 per cent in value,” he said. “Traditional banks, fintech start-ups and governments, should work together to build a robust and healthy ecosystem to provide more efficient and lower cost digital financial services to customers, including un-banked potential customers,” Lực said.   LINK