This instruction was included in Decision No 681/QD-TTg on implementing sustained development targets for Vietnam until 2030 issued by the Prime Minister last week.

The target for 2020 will be 70 percent and more than 80 percent by 2025.

Under the decision, the Government also set out plans to increase the number of ATMs per 100,000 people to 40 by 2020 and more than 40 by 2025.

The number of commercial bank branches per 100,000 people will be 20 by 2020, and more than 20 by 2025-2030.

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Photo: cafef.vn

The decision also targets the strengthening of accessibility to banking services for businesses, especially small- and medium-sized enterprises (SMEs). As part of the roadmap, the number of SMEs with outstanding loans at credit institutions will be 200,000 by 2020, 250,000 by 2025 and 300,000 by 2030.

While fintech is sweeping through the traditional economy in Vietnam like everywhere else in the world, the vast majority of residents do not have bank accounts.

Cashless transactions currently account for just 10 percent of total payments in Vietnam.

As the Government is stepping up measures to enhance cashless transactions in the country, Pham Thanh Duc, CEO of M-Service – the operator of e-wallet MoMo – expected in the next two to three years cashless payments would be the main factor significantly shifting the Vietnamese economy.

According to a plan on non-cash payments in Vietnam in the 2016-2020 period approved by the Prime Minister, by the end of 2020, the ratio of cash transactions will be reduced from 90 percent in 2016 to below 10 percent.

To boost cashless payments, Vietnamese banks are also proposing tax incentives for businesses adopting e-payments.

According to Dao Minh Tuan, deputy CEO of Vietcombank, most businesses were reluctant to purchase point-of-sale (POS) devices or establish e-payment services with the banks because there were currently no incentives to attract them.

Incentives, especially in taxes, would attract more businesses to cashless payments, which would increase payment transparency and reduce tax evasion, Tuan said.

Source: VNA