A Closer Look at Vietnam’s Primary Payment Methods

Cash on Delivery and the Digital Payment Methods Revolution

While traditional cash transactions are more familiar with Vietnamese people, digital payment methods are gradually reshaping the landscape.

For the record, cash-on-delivery (COD) has long been a player in the Vietnamese payment scene. As recently as 2020, it was the preferred method for most transactions due to the pandemic. Surprisingly, even in 2021, according to the FIS Global Payments Report, a substantial 58% of point-of-sale (POS) transactions in Vietnam still use cash. By the end of April 2021, cash payments accounted for 11.53% of all transactions in the country.

So, why does this traditional method persist in an era of digital transformation? One significant factor is the perceived security of cash. Interestingly, many Vietnamese people consider physical money safer than digital payment methods.

Cash on Delivery has a prominent position in the economy

This affinity for cash is particularly prevalent in rural, remote, and underserved areas, where digital banking infrastructure is limited. Even within e-commerce, a notable number of merchants still prefer cash payments due to the limited acceptance of digital methods.

However, beneath this preference for cash, a different trend is emerging. Vietnam boasts a predominantly young and tech-savvy population and they are increasingly open to embracing digital alternatives. As digital developments continue to shape consumer behavior, the payments landscape in Vietnam is poised for significant transformation.

E-wallets: The Game-Changers in Vietnamese Payment Methods

E-wallets have emerged as the dynamic newcomers, bringing innovation and convenience to the forefront. Most notably, MoMo and ZaloPay have taken the country by storm. According to Statista, the penetration rate of e-wallets in Vietnam is projected to grow from 19.7% in 2020 to 55.5% in 2025.

Their rapid rise can be attributed to several key factors. The widespread adoption of smartphones and user-friendly mobile applications sit atop the list.

Momo E-wallet is gradually becoming a key player in the Vietnamese market

Secondly, it is all about convenience, as payments are at your fingertips with these platforms. Users can effortlessly manage their finances, make transactions, and access various services, all within the confines of their mobile devices. This level of ease and accessibility has propelled e-wallets to the top of the ladder, transforming money and transaction management for Vietnamese people.

Bank Transfers: A convenient payment method for daily use

Bank transfers are a staple in Vietnam’s payment landscape, accounting for over 22% of all transactions. What is the secret to their enduring popularity? Trust and security are the answers you are looking for. Additionally, overseas transaction demands are at an all time high due to globalization, and bank transfers are the safest option.

What sets Vietnam apart is its seamless integration of bank transfers with smartphones, thanks to the National Payment Corporation of Vietnam (NAPAS). In a nation where smartphones are ubiquitous, this integration has revolutionized financial transactions. In Q1 of 2022 alone, there were a staggering 784.1 million domestic payments via mobile banking, according to data from the State Bank of Vietnam.

As Vietnam’s tech scene continues to evolve, bank transfers are keeping pace. Take the example of EMQ, the global financial settlement network, which expanded its real-time international payment capabilities across Vietnam in 2020. This move made cross-border transfers to and from Vietnam a breeze.

In a nutshell, bank transfers are the seasoned pros in Vietnam’s payment arena. Whether you are settling a bill at your favorite restaurants or splurging on the latest gadgets, bank transfers offer a reliable and secure way to sort out your transactions.

Buy Now Pay Later (BNPL)

BNPL is the go-to option for the younger generations, and for a good reason. Interest-free installments sweeten the deal, making it perfect for splurging on major purchases like vehicles, appliances, electronic devices, and even fashion items.

Buy now pay later is very common among the younger consumer demographics

This payment method has gained immense popularity for its flexibility. BNPL takes away the budget constraint for the time being and encourages consumers to make purchases when they need the item, not when they can afford it.

As consumers increasingly embrace the convenience and financial freedom that BNPL provides, it is no wonder that this trendsetter has taken a front seat in Vietnam’s payment landscape. It allows buyers to organize their funds according to an established payment plan without the need to save their money for a prolonged amount of time.

Credit Cards

The rising purchasing power of Vietnamese consumers has paved the way for credit cards and their immense flexibility. Instead of making an immediate cash payment and relying solely on their available funds, cardholders can opt for deferred payments. This function allows consumers to bypass the restraints of their budgets and make purchases that may have otherwise been postponed.

With their convenience and extended options, credit cards are a sign of evolving financial maturity. Also, It reflects the shifting preferences and expectations of consumers who seek modern and efficient payment solutions.

More and more vendors are now accepting credit cards while larger establishments accept international credit cards as well in order to provide customers with more options. As of 2024, the number of credit card issued is increasing and the trend is bound to continue as the purchasing power of consumers is also maintaining its upward trend.

Find out more: What are some new business models with immense potential for businesses in Vietnam?

Final thoughts

Understanding the payment methods in Vietnam is an imperative for businesses eyeing market entry or expansion. Vietnam’s foremost payment methods, such as OTC, COD, e-wallets, and bank transfers, cater to the diverse needs of local consumers. By understanding these payment methods, businesses can elevate their checkout experiences and tap into the burgeoning e-commerce sector of Vietnam.

Whether you are an entrepreneur looking to invest, a business owner seeking growth opportunities. There are loads more to know about the Vietnamese economy, visit On Digitals for more insights into the Vietnamese market. Also, our SEO, social media marketing, and website design can provide your business with a much-needed growth boost.