In the midst of payments overhaul, EP’s CPO visited cash-centric Vietnam to see the digital development and sampled some of the locals’ secret family recipes on the way.
Why do you think Vietnam is an attractive option for business expansion?
The country is going through significant change and there is huge growth potential – it is one of the fastest growing economies in the region. With strong economic forecasts, a young population and rising middle class, and development in connectivity and urbanization, it’s an exciting market to be in.
Vietnam wants to be 90% cashless by 2020 – how is that quest going?
Vietnam has one of the highest cash dominated economies in the world. If you consider that around 90 percent of transactions are done with cash and only one third of the population has a bank account, the country has some big hurdles to overcome in order to achieve their goals. There’s been rapid growth in smartphone penetration and internet usage driven by low-cost smartphones and low service costs, but I was surprised about the lack of mobile phone usage I witnessed. It’s definitely evolving for Gen Z, but Gen X and Boomers for example, still advertise the old fashion way.
How did you see consumers responding?
Vietnam’s payments landscape still has a long way to go to catch up to some of its South East Asian counterparts. The streets are filled with mom and pop shops where cash is the most preferred payment method. In fact, cards were not accepted in many stores filled with tourists. When we made our way to the bigger retail shopping malls cards were more readily accepted. However, NFC payments were not popular even in local Starbucks. They have started the conversation but the biggest challenge is going to be changing behavior.
What is being done to encourage consumers to move away from cash towards digitization?
The main factors that have slowed adoption of digital payments is low banking penetration, lack of ATMs/cashless systems and consumer fears over security – but we are seeing development in all these areas. Banks and digital payment service providers are offering incentives to promote digital banking. Security concerns are being tackled too with banks converting magnetic cards into chip cards and moves to make all ATM cards EMV-standard chip cards. These changes continue to do a great deal to further open Vietnam’s market to foreign merchants.
Finally, we hear you managed to squeeze in a local foods tour?
We were in the land of Pho so naturally we had to do as the locals do! Banh Mi in a fresh baguette roll is a great snack. But you definitely don’t want to miss the street food. These recipes have been passed down from generation to generation and everyone has their secret family ingredients. We had Banh Con – a rolled up rice flour pancakes with savory filling of minced pork and mushroom, dipped in fishy dipping sauce. Another favorite was the Banh Xeo – a crispy crepe bulging with pork, shrimp and bean sprouts wrapped in rice paper. It all tastes even better with a cup of refreshing, freshly-squeezed cane sugar juice in hand.