COVID-19 had impacted the Vietnam’s economy with reduced consumer spending, affecting the overall growth of the card payments market. The gradual reopening of businesses and easing of lockdown restrictions will provide the much-needed push to the country’s economy, which will positively impact the payment industry, says GlobalData, a leading data and analytics company.

According to GlobalData’s Payment Cards Analytics, card payments in Vietnam are estimated to grow by 11.0% in 2020 compared to the 35.3% growth in 2019. The value is expected to increase at a compound annual growth rate (CAGR) of 20.9% between 2020 and 2024 to reach VND1,432.2 trillion (US$61.8bn) in 2024.

Nikhil Reddy, Banking and Payments Analyst at GlobalData, comments: “The COVID-19 pandemic has affected consumers’ buying capacity, forcing them to cut-down on non-essential purchases, which impacted card payments growth in the short-run.”

Following the surge in COVID-19 cases, Vietnam declared nationwide lockdown on 1 April 2020. The large-scale social restrictions imposed across several regions resulted in the closure of businesses and brought the domestic and international travel to a complete halt. However, with the gradual easing of travel and other lockdown restrictions after decline in new cases, the country is now opening offices and commercial establishments.

Vietnam is one of the few countries that has been able to control the outbreak to a certain extent, recording less number of cases and low death toll. World Bank estimates the country GDP to register 2.8% growth in 2020, which will jump to 6.8% in 2021.

Mr Reddy concludes: “Vietnam’s card payments market witnessed robust growth during the past few years supported by rising financial inclusion and improvement in payment infrastructure. While the growth has been halted by COVID-19 this year, the easing of lockdown restrictions will increase consumer and commercial spending, which in turn will push card payments in the country.”