The Vietnamese card payments market will grow by 23.8% to reach VND859.2 trillion ($37.6 billion) in 2022, supported by rising consumer spending and a government push for digital payments, forecasts GlobalData, a leading data and analytics company.

According to GlobalData’s Payment Cards Analytics, the value of card payments in Vietnam registered a growth of 13.7% in 2021, raising sharply from a subdued growth of 2.2% in 2020 due to reduced consumer spending amid the pandemic. A gradual economy recovery and the opening up of businesses led the country’s card payments market to record a double-digit growth in 2021.

Ravi Sharma, Lead Banking and Payments Analyst at GlobalData, comments: “While cash remains the preferred mode of payments in Vietnam, there has been a rise in card payments in the country supported by government financial inclusion initiatives to increase financial awareness, promote electronic payments, and enhance access to banking services in the country. The introduction of mobile van branches in remote locations, the rising number of digital-only banks, and the adoption of payment technologies such as EMV and contactless are all supporting an increase in banked population and electronic payments in Vietnam.”

With a low banked population, those aged 15 and above holding a bank account, of 34%, Vietnam has traditionally been a cash-based economy. In November 2021, the government approved the cashless payment development project, in order to increase the banked population to 80% by the end of 2025 and register a 20-25% growth rate in cashless payments over the 2021-25 period.

In addition, the Vietnamese government along with central bank and other government bodies has been observing 16^th June of every year as ‘Cashless Day’ since 2019 in a bid to promote electronic payments in the country. During the event, promotions and discounts are offered to customers to encourage non-cash payment methods.

Sharma added: “The initiative attracted the participation of Visa in 2021 with the company extending its merchant network for Cashless Day offering discounts and benefits for its cardholders.”

Vietnam is also seeing heavy investments in payments infrastructure to meet the requirements of the non-cash payments. The number of POS terminals in the country increased from 278,000 in 2019 to nearly 375,000 now. In addition, there are over 100,000 QR Code accepting points to support electronic payments.

Sharma concludes: “The Vietnamese are increasingly embracing electronic payments. Rising awareness and improvement in payment infrastructure will drive card payments growth which is expected to register a strong compound annual growth rate (CAGR) of 11.4% between 2022 and 2026 to reach the value of VND1,324.2 trillion ($57.9 billion) in 2026.”