The card payments market in Vietnam, which was affected by the COVID-19 pandemic, is expected to register a strong growth of 24.1% in 2022 supported by robust economic recovery, forecasts GlobalData, a leading data and analytics company.

Vietnam is among one of the few countries, which have been able to control the spread of COVID-19 to a large extent supported by a well-developed public health system and government’s comprehensive testing, tracing, and isolation measures. This resulted in reduced impact on the economy, which registered GDP growth of 2.9% in 2020 and 2.5% in 2021, which reflects on card payments market as well.

Unlike many of its Asian peers such as Indonesia and Malaysia, which witnessed a decline in card payments in 2020, Vietnam registered 2.4% growth, reveals GlobalData’s Payment Cards Analytics.

With rise in economic activities coupled with rapid rollout of vaccination programs, the card payments value is anticipated to increase further at CAGR of 18.3% between 2021 to 2025, to reach VND1,404.7 trillion ($60.0bn).

Nikhil Reddy, Payments Senior Analyst at GlobalData, comments: “Vietnam has traditionally been a cash-based economy due to low banked population, those aged 15 and above holding a bank account, which currently stands at around 33%. With government and other regulatory bodies taking various steps to promote non-cash payments, the card payments market registered robust growth in the last five years.

To bring vast majority of Vietnamese population under the purview of formal banking system and to encourage digital payments, the government in November 2021 approved a project for cashless payment development for 2021-25. As part of this, the government plans to increase the percentage of banked population, to 80% by the end of 2025.

To further increase card payments security and consumer confidence, the central bank mandated banks to issue only chip-based cards effective from 1 March 2021. Initiatives like these will provide much needed push to the country’s underpenetrated banking industry and support growth in card payments.

Reddy concludes: “The Vietnamese payment card market is expected to register strong growth in the next five years supported by government initiatives to increase banked population and adoption of electronic payments.”