Payment Methods

Vietnam eCommerce Grows; Digital Payment Doesn’t

ECommerce sales in Vietnam are projected to grow some 22 percent in 2017, according to data from eMarketer. By the end of the year, analysts expect digital retail sales in Vietnam to make up 1.2 percent of the total retail market share. The growth is part of the broader digital boom across Southeast Asia.

But for the nation of over 90 million, many of whom are underbanked, cash is still king even as eCommerce rates climb.

In a survey from DI Marketing, 85 percent of eCommerce buyers in Vietnam reported that their primary payment method for digital was cash on delivery (COD). Only 15 percent reported payment mostly through digital methods.

On the digital payment front, there isn’t much impetus for change in Vietnam, even as smartphone penetration grows. By the end of 2018, estimates peg smartphones in the pockets of 51 percent of the Vietnamese market. Still, data cited by eMarketer indicates that mobile wallet use among digital buyers in Vietnam declined from 37 to 11 percent between 2014 and 2015.

Vietnam isn’t alone in its eCommerce growth without an accompanying rise in digital payments — the feature is common in rapidly digitizing nations with significant underbanked populations.

India, for instance, has well over 300 million active internet users and a fast-growing eCommerce market. In 2015, 80 percent of eCommerce transactions were paid via COD as access to credit cards across its population remained slim.

Another reason for consumers’ penchant for COD in burgeoning digital markets is a lack of trust in the system. COD gives consumers more control in new eCommerce markets; they have the ability to refuse to receive and pay for an item when it arrives at their doorstep.



The pressure on banks to modernize their payments capabilities to support initiatives such as ISO 20022 and instant/real time payments has been exacerbated by the emergence of COVID-19 and the compelling need to quickly scale operations due to the rapid growth of contactless payments, and subsequent increase in digitization. Given this new normal, the need for agility and optimization across the payments processing value chain is imperative.

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