Payment for public services: gold mine for banks
VietNamNet Bridge - Money collection services have brought big money to commercial banks. 


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The representative of the HCMC Electricity of Vietnam (EVNHCMC) said at a recent workshop on a non-cash society that it has stopped collecting money for electricity bills directly from customers since 2018. 

About 90 percent of bills are now paid via intermediary institutions, including 23 commercial banks and nine partners. The proportion is much higher than the 21.6 percent in 2010.

As of the end of 2018, the non-cash payment proportion had reached 90.51 percent.

In the future, the payment for public services such as education, healthcare and environment will also be implemented this way as the government has released Resolution No 02 requesting to accelerate non-cash payment modes prior to December 2019.

In the future, the payment for public services such as education, healthcare and environment will also be implemented this way as the government has released Resolution No 02 requesting to accelerate non-cash payment modes prior to December 2019.

In the past, the bills for public services were small and commercial banks hesitated to provide money collection services because of high costs (connection and infrastructure costs). That was why money collection service fell into the hands of e-wallets.

However, things have changed with bigger collection items, new payment habits and technology development, which have prompted banks to reconsider their decision.

Since the day the taxation department kicked off the online tax declaration and payment system, many commercial banks have begun providing tax payment services. 

With the new service, banks not only can collect service fee, but also can get benefits as they can mobilize capital at low costs and sell products and services to associated units or businesses. 

Realizing that money collection services are a ‘gold mine’, banks have taken the initiative to invite public service providers for cooperation. However, banks have found it difficult to get the nod from potential partners, even though banks promised to be in charge of infrastructure and technology.

Tu Tien Phat, deputy CEO of ACB, said the bank has contacted many schools nationwide. 

“The biggest obstacle is that schools don’t have money to pay service fees to banks,” he said. 

“Meanwhile, every school has its own specific IT system and many schools don’t have this,” he added.

However, Dam Bich Thuy, president of Fulbright University, former CEO of ANZ Vietnam, said the fee is not the biggest barrier. Convenience must be considered the most important factor.

Pham Tien Dung, director of the State Bank’s Payment Department, also said there should be more products suited to users’ behaviors and demands, especially in rural areas.

According to the central bank, 76 units have been carrying out payment services via the internet and 41 via mobile devices. More commercial banks have joined the playing field.


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Thanh Lich

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