New regulations on payment methods raise controversy

VietNamNet Bridge – People, who buy houses, cars and valuable assets, would have to make payment through banks, not to pay in cash.

Vietnam, non-cash economy, payment method, decree, investment

Striving for a “non-cash economy”

The State Bank of Vietnam, which is drafting a government’s decree on making payment in cash, has decided to take a step forward in implementing the plan aiming to a non-cash economy. The draft decree says that people must make payment via banks for the car and house transactions.

Despite the great efforts to improve the payment methods, cash still has been the most popular payment method among people. A report by the State Bank of Vietnam showed that cheques nearly have not been used, orders for payment have been used mostly to pay for electricity and water bills, and cards have been used just to withdraw cash from ATMs.

The report has found that Vietnamese still prefer making payment in cash in order to avoid tax and keep the deals in secret.

Will it help?

Though agreeing that the watchdog agency needs to take actions to reduce the proportions of non-cash payment in the national economy, economists still keep doubtful about the feasibility of the decision.

It’ll take a long time to change the people’s habit of making payment in cash. In 2001, cash accounted for 23.4 percent of the total broad money supply (M2). The proportion decreased slightly by 1-2 percent in the next few years, but remains high.

In 2008, the proportion of cash on M2 was 14.6 percent. The figure was lower at 14.01 percent in 2009, but then increased again to 14.2 percent in 2010.

The Payment Department of the central bank, the compiler of the draft decree, itself anticipated the opposition from the public.

Cong Ly, a reader (, said that only when the banking system can modernize its technical infrastructure to satisfy people’s demand, should it think of demanding payments to be made via banks.

Le Anh ( has warned that the new regulation would cause troublesome to people. He commented that it is necessary to renovate the banking system first and then force people to make payment via banks.

New decision will only feed up banks

The draft decree has also set up the cash payment service fees. At present, the fee is about 0-0.05 percent of the total volume of cash transacted. However, the central bank thinks that the fee is not high enough to encourage individuals and businesses to make payment via banks.

Though banks can charge fees on the clients who make payment in cash, in fact, most of the banks apply the zero percent fee level in order to attract more clients.

Therefore, according to the central bank, there is a principle to follow that one must pay fee when withdrawing cash, and the fee must be higher than the money transfer fee.

This means that instead of the “COD” (cash on delivery) mode, people would have to make transactions via banks and have to pay fee, even though they don’t want to use bank services.

Some polled people have affirmed that they don’t want to use the service of making payment via banks, saying that they do not want to waste their money.

Workers were once forced to receive salaries via their bank accounts instead of receiving directly from cashiers. Later, they have been informed that they have to pay fee to receive the salaries – withdraw money from ATMs. This is really an unreasonable regulation, according to Minh Tam (

Phuoc Ha

Vietnam, non-cash economy, payment method, decree, investment