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LUẬN văn THẠC sĩ some solutions for developing cashless payment in agribank viet nam

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  • CHAPTER 1: THEORETICAL BACKGROUND (14)
    • 1.1. Digital society (14)
    • 1.2. Cash (15)
      • 1.2.1. The history of using cash (15)
      • 1.2.2. Cashless society (17)
      • 1.2.3. Cashless payment in fact (19)
      • 1.2.4. Examples of Cashless Societies (20)
    • 1.3. Types of cashless payment in the world (21)
      • 1.3.1. Cashless Payments Using RFID (21)
      • 1.3.2. Mobile Payments (21)
      • 1.3.3. Contactless Credit Cards (22)
      • 1.3.4. Cheque (22)
      • 1.3.5. Demand Draft (23)
      • 1.3.6. Online Transfer- NEFT or RTGS (23)
      • 1.3.7. E-Wallets (23)
      • 1.3.8. UPI Apps (23)
      • 1.3.9. Gift Card (24)
      • 1.3.10. Aadhaar Enabled Payment System (24)
      • 1.3.11. Unstructured Supplementary Service Data (24)
    • 1.4. Cashless payment in Viet Nam (24)
      • 1.4.1. Customers have to appear to bank sites (25)
      • 1.4.2. Customers do not need to appear in bank sites (25)
    • 1.5. Cashless payment from the view of Vietnam Government (26)
      • 1.5.1. Overall objectives (26)
      • 1.5.2. Specific targets (27)
      • 1.5.3. Solutions (27)
  • CHAPTER 2: STATUS OF CASHLESS PAYMENT IN VIETNAM (29)
    • 2.1. Introduction of Agribank Vietnam (29)
      • 2.1.1. General information (29)
      • 2.1.2. Business strategy in the 2016-2020 period with a vision to 2030 . 23 2.1.3. Agribank network (31)
      • 2.1.4. Cultural values (33)
      • 2.1.5. Contact information (35)
    • 2.2. Products of cashless payment (36)
      • 2.2.1. Personal Cards (36)
      • 2.2.2 Agribank E- Mobile Banking (44)
      • 2.2.3. QR PAY (46)
    • 2.3. The situation of cashless payment in Agribank in recent years (48)
    • 2.4. Results of actual survey research (54)
      • 2.4.1. Quantitative research (54)
      • 2.4.2. Qualitative in-depth interview research (60)
  • CHAPTER 3: SOLUTION (66)
    • 3.1. Recommended solutions to the Government, (66)
      • 3.1.1 To Issue a number of policies to encourage electronic payment (66)
      • 3.1.2. Promote e-payment in public administrative services (67)
    • 3.2. Solutions for implementation by Agribank (68)
      • 3.2.1. Develop cashless payment in rural areas (68)
      • 3.2.2. Recruiting and training the staff to meet the increasing demands of (69)
      • 3.2.3. Immediate and Urgent solutions (70)
      • 3.2.4. Comprehensive solutions and customer classification (71)
  • Appendix 1: Transaction fee for using international card (85)

Nội dung

THEORETICAL BACKGROUND

Digital society

The world, as we know today, is continually changing, and one of the fundamental drivers is digital transformation Digital transformation isn‘t only about Internet ―unicorns‖, it is also about using the latest technology to do what you already do – but in a better way

The global economy is undergoing a digital transformation as well, and it‘s happening at the fastest speed

So, what is the digital economy? It′s the economic activity that results from billions of everyday online connections among people, businesses, devices, data, and processes The backbone of the digital economy is hyperconnectivity which means growing interconnectedness of people, organisations, and machines that results from the Internet, mobile technology and the internet of things (IoT)

The digital economy is taking shape and undermining conventional notions about how businesses are structured; how firms interact; and how consumers obtain services, information, and goods

Professor Walter Brenner from the University of St Gallen in Switzerland states: ―The aggressive use of data is transforming business models, facilitating new products and services, creating new processes, generating greater utility, and ushering in a new culture of management.‖

Recently, TechCrunch, a digital economy news site, noted, “Uber, the world’s largest taxi company, owns no vehicles Facebook, the world’s most popular media owner, creates no content Alibaba, the most valuable retailer, has no inventory And Airbnb, the world’s largest accommodation provider, owns no real estate… Something interesting is happening

In banking service, digital technology will change the way from the old to new, from low to fast and correct transactions.

Cash

Cash is money but in the physical form of currency, such as bank notes and coins In bookkeeping and finance, cash is the current asset comprising of currency or currency equivalents which can be accessed immediately or nearly-immediately (as in the case of money market accounts) Cash is seen either as a reserve for payments, in case of a structural or incidental negative cash flow or as a way to avoid a downturn on financial markets

1.2.1 The history of using cash

In Western Europe, after the fall of the Western Roman Empire, coins, silver jewelry and hacksilver (silver objects hacked into pieces) were, for centuries, the only forms of money, until Venetian merchants started using silver bars for large transactions in the early Middle Ages In a separate development, Venetian merchants started using paper bills, instructing their bankers to make payments Similar marked silver bars were in use on lands where the Venetian merchants established representative offices The Byzantine Empire and several states in the Balkan area and Kievan Rus also used marked silver bars for large payments As the world economy developed and silver supplies increased, particularly, after the colonization of South America, coins became larger and a standard coin for international payment was developed from the 15th century: the Spanish and Spanish colonial coin of 8 reales Its counterpart in gold was the Venetian ducat

Coin types would compete in different markets By conquering foreign markets, issuing rulers would enjoy extra income from seigniorages (the difference between the value of the coin and the value of the metal that the coin was made of) Successful coin types of high nobility would be copied by lower nobility for seigniorages Imitations were usually of a lower weight, undermining the popularity of the original As feudal states coalesced into kingdoms, imitation of silver types abated, but gold coins, in particular, the gold ducat and the gold florin, were still issued as trade coins: coins without a fixed value, going by weight Colonial powers, without much success, also sought to take away market share from Spain by issuing trade coin equivalent to silver Spanish coins

In the early of the 17th century, English East India Company coins were minted in England and shipped to the East

At this time coins were also being produced at the Madras mint for the East Indian Companies The currency at the company‘s Bombay and Bengal administrative regions was the rupee

Meanwhile, paper money had been developed At first, it was thought of for emergency situations, hence were most popular in the colonies of European powers In the 18th century, important paper issuance were made in colonies such as Ceylon and the bordering colonies of Essequibo, Demerara and Berbice

The ability to create paper money made nation-states responsible for the management of inflation through controlling money supply It also created a direct relation between the metal of the coin and its denomination superfluous From 1816, coins generally became token money, though some large silver and gold coins remained standard coins until 1927 The World War I saw standard coins disappear to a very large extent Afterwards, standard gold coins, mainly British sovereigns, were still used in colonies and less developed economies, and silver Maria Theresa thalers dated 1780 was struck as trade coins for countries in East Asia until 1946 and possibly locally in the later time

Cash has now become a very small part of the money supply Its remaining role is to provide a form of currency storage and payment for those who do not wish to take part in other systems, and make small payments convenient and prompt, though this latter role is being replaced more and more frequently by electronic payment systems Research has found that the demand for cash decreases as debit card usage increases because merchants need to make less changes for customer purchases

Cash is increasing in circulation The value of the United States dollar in circulation increased by 42% from 2007 to 2012.The value of pound sterling banknotes in circulation increased by 29% from 2008 to 2013.The value of the euro in circulation increased by 34% from August 2008 to August 2013 (2% of the increase was due to the adoption of euro in Slovakia 2009 and in Estonia 2011).

A cashless society might sound like something out of science fiction, but we‘re already on our way Several powerful forces are behind the move to a cash-free world, including governments and large financial services companies Even critics of the mainstream financial system and government- issued currencies favor doing away with cash

But we‘re not yet there In addition to logistical challenges, we need to address several social issues before giving up on cash entirely

Benefits of a Cashless Society Less crime: With cash, it‘s easy to steal money, whether the amount is large or small Also, illegal transactions (drug trade, corruption, money laundering for example) typically take place with cash, so that there‘s no record of the transaction—and so that the seller can be certain about getting paid

Paper trails: Financial crime should also dry up It is harder to hide income and evade taxes when there‘s a record of every payment you receive Money laundering becomes much harder if the source of funds is always available

No cash management: It costs money to print bills and coins Businesses need to store the money, get more when they run out, and deposit cash when they have too much on hand Moving money around and protecting large sums of cash could become a thing of the past

International payments: When you visit a foreign country, you may need to buy local currency But payments are easy if both nations can handle cashless transactions Instead of figuring out another currency, your mobile device handles everything for you

Disadvantages of a Cash-Free World

Depending on your perspective, going cashless might actually be problematic

Privacy: Electronic payments mean less privacy You might trust the organizations that handle your data, and you might have nothing to hide, but your payment information could turn up in ways that are impossible to predict Cash allows you to spend money and receive funds anonymously

Hacking: Hackers are the bank robbers and muggers of the electronic world

In a cashless society, the consequences are higher if somebody drains your account because you don‘t have any alternative ways to spend Even if you‘re protected under federal law, you face significant inconveniences and other consequences after a breach

Types of cashless payment in the world

There are many types of cashless payment applied all over the world And basing on the condition of their technologies, each country has its own kind

RFID technology uses radio waves to track tags containing electronic information Tiny RFID tags can be attached to wristbands, lanyards or badges, and can be scanned using dedicated scanners or modern smartphones

One of the most popular use cases for RFID, mainly in events, is using the RFID tags as ‗wallets‘ that attendees use to pay for food, drinks and merchandise (after topping them up with credits, either before or after the event)

In an RFID payment system, attendees would simply present their wristband to the vendor, who would then use his or smartphone or dedicated scanner to charge them for whatever they‘re buying This can be used alongside traditional payment methods or as the exclusive way for consumers to conduct transactions at the event

Mobile payment refers to various apps that turn the smartphones consumers are already carrying into a digital wallet which can be used to pay for goods and services Google‘s Wallet (recently rebranded Google Pay) and Apple Pay have both launched in recent years, and have seen some adoption in the United States, Europe and Australia

However, the most significant advances in e-payments have actually been in China, where Wechat Pay and Alipay have seen massive adoption of their QR-based mobile payment system; while WhatsApp payments have recently been launched in India

With at least one of these apps already available in virtually every event- goer‘s pocket, it only makes sense to wonder whether mobile wallets are set to be the standard in cashless payments at events and elsewhere However, we believe the answer to that is negative – mostly because these devices rely on internet connectivity, which is often scarce at remote festivals

Contactless credit cards, such as the ones provided by Visa and Mastercard, are growing increasingly popular with consumers These allow credit card transactions to be completed instantly simply by scanning the card, rather than the cumbersome method of swiping it in a reader

Contactless cards are similar to RFID wristbands in that they are both very fast and easy ways to make payments However, there are also several key differences; and similarly to mobile phones, their main drawback as a cashless payment method at events is that almost all credit card payments are processed online, which could lead to event operations breaking down or slowing down during periods of intermittent connectivity

The cheque is one of the oldest methods of cashless payment It is a known method to everyone In this method, you issue a cheque for the specific amount to someone else The cheque gets deposited in the respective bank

The bank processes a payment through a clearing house

The entire transaction done through cheque gets recorded and there is a proof of payment However, there are instances where cheque payments get dishonored due to signature mismatch or insufficient fund In order to avoid such issue, you can use other cashless payment options

Demand draft is another rudimentary way of cashless transaction It is a safest option to receive payment from anyone Demand draft (DD) never gets defaulted as it is signed by the banker The disadvantage of DD and cheque is you need to visit a bank in order to deposit cheque and demand draft The clearance of cheque or DD takes additional time

1.3.6 Online Transfer- NEFT or RTGS

The third simplest method for the cashless transaction is online transfer using NEFT or RTGS In order to do online money transfer, you need internet banking facility Online transfer using NEFT or RTGS is comparatively faster than cheque or DD Online transfer can be done from anywhere using internet facility

E-wallet is the next cashless payment option E-wallet can be used to purchase products starting from grocery to airline tickets In order to use E- wallets customer and merchant, both require a smartphone with active internet connection The most popular example of E-wallet is PayPal Apart from PayPal, you can also use Payoneer, Transferwise, Skrill, and PayZa

After registering for E-wallet you need to link your credit card or debit card with your E-wallet id You can use e-wallet for fund transfer or online shopping It is a simplest cashless method

UPI is a mobile payment system which allows you to do various financial transactions on your smartphone UPI allows you to send or receive money using virtual payment address without entering bank information Merchants can enroll with banks to accept payments using UPI Like in the case of a PoS machine, the merchant would require a current account with a bank to accept UPI payments

The examples of few UPI Apps are SBI Pay, ICICI Pocket, Axis Pay UPI App, Union Bank UPI App, PNB UPI, PhonePe, TranZapp etc

Cashless payment in Viet Nam

In Vietnam, where the technology platform is not high From observation in Agribank and other banks, I realize that some types that can be applied:

1.4.1 Customers have to appear to bank sites

Cheque: a printed form, used instead of money, to make payments from your bank account: In Vietnam, we often use this kind to withdraw money from the bank for our cash payment purpose

Authorized payment (payment order): for individuals and enterprises: this is the paper with infomation of payer, receiver, amount of money, authorised signature and stamp of payers that order the bank to pay to the account of receivers with the information provided

Letter of credit: oversea payments or to other countries for goods and services

1.4.2 Customers do not need to appear in bank sites

- Mobile banking and internet banking: we load an app on mobile and make payments and provide identification notice to make sure that you are the owner of that bank account

- Master, visa and JCB card: are the products of banks which suppy the limitation of amound of money for you to make transations when buying goods and servies

- QR code payment: is a contactless payment method where a payment is performed by scanning a QR code via the mobile app This is an alternative for doing electronic fund transfer by using a payment terminal This avoids a lot of traditional infrastructure serving for electronic payments such as payment cards, networks, terminal and merchant accounts

To use a QR code payment the consumers scans the QR code displayed by the merchant with their phones to pay for their goods They enter the amount they have to pay and finally submit This is a more secure card-not-present method than others

ATM card: is often used to withdraw money from ATM for individual payment purposes

E- Wallets: Grap Pay, Payyoo, Shopee… customer payment through the connection of Visa, Master Card and the Wallets

Internet Banking: using computer and internet with online accounts

Because using new technology to bank requires the innovation from the top and the whole system, I choose the scope of my thesis as the system of Agribank

Technology Platform, Inteligent Mobile device with wifi and 3G, users can make payments by themselves, is the way of my thesis

In this thesis, I concentrate on E-mobile banking, QR Pay and Credit Card in Agribank

Cashless payment from the view of Vietnam Government

Our Government is also having great concern on Cashless payment and The Prime Minister of the Government issued Decision No 2545 / QD-TTg, dated 30/12/2016, ―approval for the Scheme for Development of Cashless Payment in Vietnam for the period of 2016-2020‖

The content of this decision has the following notes:

1.5.1 Overall objectives a/ To make a marked progress in non-cash payment in the national economy, thereby, changing the habit of using payment instruments in society, reducing cash payment-related social costs and the ratios of cash in circulation to the gross domestic product (GDP) and of cash to total payment instruments; b/ To ensure security, safety and operational effectiveness of payment and settlement systems, and cashless services and payment instruments; to create effective mechanisms to protect users of cashless payment services; c/ To promote the use of e-payment and reduce the use of cash in payment transactions between individuals, enterprises and governmental agencies; d/ To improve the effectiveness of the management and supervision by state management agencies, and make payment activities in the economy and personal incomes transparent, thus contributing to the prevention and combat of corruption, negative practices and economic crimes

1.5.2 Specific targets a/ By the end of 2020, the ratio of cash to total payment instruments will be below 10%; b/ To strongly develop card payment using card readers at points of sale (POS); to gradually increase the number and value of card payment transactions using card readers By 2020, the whole market will have over 300,000 card readers installed at POS to process around 200 million transactions per year; c/ To promote e-payment in e-commerce, strive to achieve the targets set out in the master plan on development of e-commerce during 2016-20 (100% of modern supermarkets, shopping malls and distribution centers will have card readers which enable consumers to make non-cash payments when purchasing goods; 70% of electricity, water, telecommunications and communications service providers will accept non-cash payment of charges;

50% of individuals and households in major cities will use non-cash payment instruments in their shopping and consuming activities); d/ To concentrate efforts on developing a number of new and modern payment instruments and forms in rural, remote and deep-lying areas, thus contributing to promoting financial inclusion; to drastically increase the number of people having access to payment services, and increase the percentage of people aged 15 years or older having bank accounts to at least 70% by the end of 2020

1.5.3 Solutions: a Improving the legal framework, mechanisms and policies b Upgrading and expanding the interbank e-payment systems to meet the needs of the economy and the process of international economic integration c Building and developing retail payment systems and services d Promoting e-payments in the governmental sectors and public administrative services e Renovating the securities clearing and finalization system f Innovating the payment and finalization systems on the interbank monetary and foreign-currency market h Enhancing management and supervision of international payments and money transfers g Supervising and applying standards to payment systems according to international criteria and standards k Stepping up information, communication, training, guidance and customer protection in non-cash payment l Enhancing coordination to promote non-cash payment

So improving cashless payment is the way and direction that our Government wants to achieve and supports in overall The launching of Decision 2545 is the framework for Agribank and other commercial banks to develop the cashless payment system, not only for the profit and efficiency purposes, but also for the development of our society.

STATUS OF CASHLESS PAYMENT IN VIETNAM

Introduction of Agribank Vietnam

Agribank: Leading Vietnam‘s rural credit market Since its establishment in 1988, Vietnam‘s Agribank has continuously played a key role in contributing to the development and gained significant achievements of the country‘s valuable agricultural industry

Vietnam Bank for Agriculture and Rural Development (Agribank) is the only 100% state-owned commercial bank in Vietnam Throughout its development, Agribank has always been the largest bank in Vietnam in terms of total assets, operating network and customer base The bank‘s market share includes 16% of the total funding sources and outstanding loans that make up Vietnam‘s banking system as a whole

As of December 31, 2017, total assets of Agribank reached nearly VND one million two hundred thousand billion, mobilized capital reached nearly VND one million one hundred thousand billion; total outstanding loans to the economy reached nearly VND 900 trillion, of which the proportion of outstanding loans for agriculture and rural areas was 73.6%; profit before tax reached VND 5,018 billion (the highest ever), an increase of 19.9% compared to 2016

Agribank has played a very important role in the development of the country‘s economy in general and particularly in the agricultural sector and rural areas of Vietnam – a country in which 70% of the workforce is employed in the agricultural sector and 80% of the population lives in rural areas The agricultural sector contributes to about 22% of the country‘s GDP and makes up 30% of its export turnover Over almost 30 years of development, Agribank has been consistently pursuing its investment focus and upholding its key and leading position as a financial institution providing credit and financial services primarily to Vietnam‘s agricultural and rural areas Agribank outstanding loans for agricultural and rural areas account for 73.6% of its total outstanding loans and 50% of total outstanding loans of the banking sector for these areas

Sustaining development Agribank has a stable structure of liabilities comprising 80% of Vietnam‘s public mobilization, which is invested in the country‘s programs and agricultural development priorities These include the lending programs for the food industry, aquaculture, coffee, husbandry, rubber, pepper and cashew planting, the national targeted program for New Rural Development, the supporting programs to lessen the loss of agricultural production, the lending program for social housing, the pilot lending to association models in the agricultural value chain from production to consumption and the models of hi-tech application to agricultural production

An international partner Agribank‘s investment in the agricultural and rural sector has made good contributions to a positive change in the country‘s economic structure, job creation, infrastructural development, customers‘ income increases and social-economic stabilization in rural areas With its experience and prestige in the rural credit field, Agribank is always the first partner in Vietnam entrusted by international donors including the World Bank (WB), the Asian Development Bank (ADB) the the European Investment Bank (EIB, in implementing their credit projects within the country

Agribank is also a partner and constructive member of many international associations, which include the World Savings and Retail Banking Institute (WSBI), Asia-Pacific Rural and Agricultural Credit Association (APRACA) and the International Agricultural Credit Confederation (CICA)

Hi-tech Banking Developing and applying technology in banking operation has also been Agribank‘s focus The bank was the first in Vietnam to complete its core banking project financed by the World Bank, which modernized the customer accounting and payment system (IPCAS) Relying on a well-invested technology base, Agribank has achieved substantial progress in governance, management and in the development of advanced banking products, services and utilities

Agribank‘s strategy for the coming years will see the bank continue to enhance its key role in the monetary and credit market for agriculture and rural areas: providing diversified products and services that are tailored to the features of each region or area, while maintaining its position as the largest commercial bank and financial institution in Vietnam, committed to contributing to the country‘s achievements in industrialization, modernization and development

2.1.2 Business strategy in the 2016-2020 period with a vision to 2030

Year 2017 is identified as a significant year in the roadmap for implementing the Business Strategy in the 2016-2020 period with a vision to 2030

Agribank's goal is to maintain its position as the leading commercial bank in Vietnam operating under the model of state-owned commercial bank; have a modern technology foundation, advanced management model, and sound financial capacity; maintain safe, efficient, stable, and sustainable development; maintain its key role in investment, development assistance, and the provision of financial and credit services for agriculture and rural areas

Agribank will continue to take firm steps, operate its business in a secure manner, achieve the set objectives, fulfill the political tasks assigned by the Party and the State, contribute positively to the implementation of monetary policy, removing difficulties, improving business investment climate, promoting economic growth, especially in economic development of agriculture and rural areas

2.233 branches and transaction offices across the S-shape of Vietnam Agribank is the biggest commercial bank in VietNam with an operating network of 2,233 branches and transaction offices nationwide which have been connected online In 2010, Agribank has extended the network by opening its first branch in the Kingdom of Cambodia

With the leading role in rural and agricultural financial market, Agribank has paid attention to expand its operating network to districts and communes in order to facilitate the customers across the country to get access to bank loans easily and safely The customer base of Agribank now includes 60,000 businesses, 4 million production households, and 10 million individual customers The nationwide network has created Agribank advantage in improving the competitiveness in the challenging integration process

To meet the demand for import-export payment of local and foreign customers, Agribank has focused on expanding the correspondent relations with other banks To date, Agribank has 837 correspondent banks in 88 countries and territories Agribank signed agreements with Agricultural Promotion Bank (APB), Phongsavanh Bank - Laos, Acleda Bank - Cambodia, Agricultural Bank of China (ABC), Bank of China (BOC), China Construction Bank (CCB), Industrial and Commercial Bank of China (ICBC) and many more on cross border payment from which customers and all parties benefit

Apart from 2.233 branches and transaction offices, as a leading commercial bank in Viet Nam, Agribank has 6 subsidiaries: Financial Leasing Company

No 1 (ALC 1), Agribank Services One Member Limited Liability Company, Agribank Gold Joint Stock Corporation (AJC), Agribank Securities Joint Stock Company, Agribank Insurance Joint Stock Corporation (ABIC), and Agribank Debt Management and Assets Exploitation Limited Co (AMC)

Agribankers always have the special cultural values with passion for work and dedication to the development of the Agribank for 30 years until now

The characters are as below:

Honesty: is interpreted as per someone‘s thought, something has existed and happened, or integrity, truthfulness (an honest person or a person with honesty)

Products of cashless payment

Visa/Master debit card issued by Agribank allows individual cardholders to use cards in scope of payment account balance and/or overdraft limit in order to pay for goods, services, withdraw/advance cash and other services at ATM, EDC/POS worldwide or through internet transactions There are two kinds of these: Debit Classic and Debit Gold

With this kind of card, customers can make lots of benefits, such as withdrawing/advancing cash at ATM, EDC/POS at counters and other cash- advance points world-wide (VND in Vietnam and other currencies in other countries) or paying for goods and services at EDC or through the internet

Customers can also get the account balance inquiry or change PIN code, transfer money, deposit Get account statement, pay bills, buy prepaid cards at ATM, EDC/POS at counters Customers can use Mobile Banking: balance change, a transfer, recharge for prepaid mobile, payment of mobile phone contracts, Vnmart e-pocket

In case customers have stable monthly income, they are granted an overdraft limit up to VND 30 million with a term of maximum 12 months if requested

Customers get free card for accidental insurance worldwide with the insured coverage up to VND15 million/card when satisfying Agribank conditions

Customers get demand interest on their payment accounts with the rate 0.2% per year Their account and personal information is kept confidential

There are some conditions for issuance for individuals that want to own a card

Agribank issues card for main card holders and also for supplementing card holders:

Customers are Vietnamese citizens or foreign residents living in Vietnam with duly civil capacity and civil responsibility as stipulated by the law They have a payment account opened by Agribank

Customers agree to comply with regulations of Agribank international cards issuance, management, utilisation and payment

Customers agree to sign the card using contract with Agribank Individual customers applying for overdraft must have stable incomes and guarantee the debt payment within overdraft term and use the payment accounts opened at a Agribank branch where they apply for overdraft for salary payment and social allowances

Main card holders may be issued up to two (02) supplement cards

Customers with duly civil capacity as stipulated by applicable law or with civil capacity and from 15 to under 18 years old and accepted by their representatives in law for card use

Customers agree to comply with regulations of Agribank international cards issuance, management, utilization and payment

Supplement card holders are guaranteed by main card holders for all liabilities arising with regard to the card use

For issuance of the card, the bank needs some personal information documents from customers:

Customers fullfil the Application form for banking service use and copy their

ID cards or passports withone 3x4cm photo taken within the last 6 months and then sign in card use contract together with salary or social allowances certificate by relevant organizations (if applying for overdraft)

There is an amount limitation transaction for the card depending on the transaction at ATM or EDC/POS which limits the maximum amount of transaction for the safety of the owner Customers can make payment under the allowed amount The following table describes the transaction limit per day

At ATMs At EDC/POS

Payment for goods and services/day/car d

2.2.1.2 Visa/Master International credit cards

Credit Visa/MasterCard Cards issued by Agribank to individual clients are used and accepted for payment globally with the facilities of overdraft, purchasing goods and services in advance, and post -payment which brings favorableness to clients anytime and anywhere

There are 3 types of Visa/Master credit card:

- Gold (Visa/MasterCard Credit Gold)

With this kind of card, the usages are variable and can satisfy customer needs

Customers can withdraw/advance cash at ATM, EDC/POS at counters and other cash- advance points world-wide (VND in Vietnam and foreign currencies in other countries) Customers can pay for goods and services at EDC or through the internet, book for accommodation, air ticket, travel tour and so on, get account balance inquiry at ATM, EDC/POS at counter, change PIN code at ATM, EDC/POS at counters, get free card holder accidental insurance worldwide with the insured coverage of VND15 million/card for Standard/Gold card and up to USD 5.000 for Platinum Card when satisfying Agribank conditions Customers enjoy competitive interest of lending via credit card and are free of interest for all payments made for goods, service for 45 days when making payments to all outstanding loans upon maturity

This type of cards also requires some conditions for individuals who want to have a card for the purpose of managing the client‘s information The card is issued for the main card holder and supplement card holder:

For main card holders Customers are Vietnamese citizens or foreign residents in Vietnam with duly civil capacity and civil responsibility as stipulated by the law, having a payment account opened at Agribank For foreigners, their remaining residency/working period in Vietnam will be equal to the remaining effective period of card plus 45 days Customers must have stable and legal income and loan guarantee agreeing to comply with the regulations of Agribank international cards issuance, management, utilization and payment And also Customers agree to sign the card using contract with Agribank Main card holders are entitled to have maximum 02 supplement cards issued

For supplement card holders Customers with duly civil capacity as stipulated by applicable law; or with civil capacity and from 15 to under 18 years old and accepted by their representatives in the law of card use Customers agree to comply with regulations of Agribank international cards issuance, management, utilization and payment Supplement card holders are guaranteed by main card holders for all liabilities arising with regard to the card use

For the issuance of card, there are some easy procedures for customer at the beginning

Application form for card issuance is given by Agribank A copy of the ID cards or passports, a 3x4cm photo taken within the last 6 months, and she/ he will sign the Card use contract And the last is loan guarantee documents or salary proof, social allowances by relevant authorized organizations All are with forms already printed available for customer

Credit line for 3 kinds of card is different base on the needs, the reputation and monthly salary of the individual Customer can use lessnthan the maximum amount of each type:

500,000,000 Customer can take the advance cash within the limitation: equivalent to a half (1/2) of granted credit line

Limit for payment of goods and services: equals to the remaining granted credit limit minus advance cash limit already used and not yet repaid in the period

2.2.1.3 International master cards of Agribank for business

International credit card MasterCard issued by Agribank to individual customers authorized to used by the enterprise is used and accepted for payment on the global scale with the facilities of advancing money, purchasing goods and services in advance and post -payment which bring favorableness to the client

International Master Card of Agribank has only one credit limit, Gold Credit (MasterCard), with the image above

The situation of cashless payment in Agribank in recent years

The author collects Agrbank's 2016 and 2017 Financial Statements audited by Ernst & Young Global Limited and analyses figures for a more in-depth view at Agribank Vietnam's business and to see why Agribank moves to strengthen cashless payment services such as card, E-Mobile banking and QR Pay

Derivatives and other financial assets

Liabilities Debts owed by Government and State Bank

Revenue from loan interest 80.266.508 68.167.713 Expense from deposit interest (46.245.007) (39.829.781)

Net income from loan activities 34.021.501 28.337.932

Net income from service activity 3.061.853 2.580.635

Net gain from foreign exchange activity

Net loss from trading securities (1.321) (152.563) (Loss)/Gain from investment securities trading

Net gain from other activities 5.072.477 4.340.048 Net gain from capital contribution 127.569 47.256 and shre purchase

Net operating profit before provision for credit loss

Notes to the Financial Statement Interest Income

Interest from investment in debt securities investment

Interest income from finance lease 168.308 58.295

Other income from credit activities 1.783 3.097

Cost of issuance of valuable papers 1.265.643 1.002.605 Cost of interest on financial lease of fixed assets 17.097 22.264

Income from payment services 3.423.577 2.828.036 Income from the treasury service 165.931 162.528 Income from entrusted services and agents 27.204 2.393

Postage and telecommunications expense 122.027 116.627 Counting and storage cash expense 240.943 234.132

Expenses for agency and agents 7.626 85 consulting services expense 10.019 9.398 insurance services expense 341.135 348.871

Net income from service activities 3.061.853 2.580.635

Comments and analysis from the financial statement:

The abbreviated financial statements above have pointed out the characteristics of Agribank's business

It is clear that Agribank has a very large total of assets which have increased steadily over the years 2016 and 2017 The capital is mainly focused on lending to customers and securities trading The structure of debt mainly comes from the deposits in the residents So from the balance sheet, it can be seen clearly that Agribank mainly mobilizes capital and carries out loans

Fixed assets take up a small part in the total assets as Agribank has not paid much attention to the technology investment, research for new technology platforms applied in the Bank It only makes cooperation with other entities like VN Pay to share the fee collected for technology platform provided

The main source of revenue comes from lending and providing banking services Revenue from loans account for about 80% of total revenue, and services accounting for only 10-15% of total revenue However, according to the data above, it is found that despite the high lending revenue, the provision for bad debts (18.5 trillion dong in 2017) has eroded Agribank's profit considerably Bad debt which was sold to VAMC and converted into 5-year bonds which are due in 2018 will come back, and these bad debts have not yet been made provision and debt clearing So the current lending business is quite risky for Agribank

Income from payment services accounts for a large portion in the total service revenues, and increases steadily over the two years, from 2016 to 2017

Basically, this activity contains little or no risk, no provisioning and quite lasting But still now this activity accounts for a very small proportion of the total revenue

According to Agribank's financial statement, Agribank's profit is lower than that of other banks such as Vietcombank, Viettin Bank and BIDV (theirs often of VND8-10,000 billion in net profit in 2017) Return on assets (ROA) is too low because Agribank is much focused on lending and mobilizing the capital, while it does not control risk or forecast trends of the domestic market Agribank lost equity mainly in big cities like Hanoi and Ho Chi Minh City and western provinces

In conclusion, Agribank should focus on mobilizing activities in big cities, transferring capital for lending in rural areas In large cities, lending is not encouraged, it just focuses on banking services, taking advantages of the large number of customers and networks across 64 provinces in our country to increase the number of service users It has created stable and sustainable income, kept up with the trend of big banks in developed countries in the world.

Results of actual survey research

Firstly, the author interviewed 10 customers using services and got their assessment by using structure of questionnaires The edited questionnaires, then, would be applied to collect data with the size of sample is 220

Surveyed area: The whole system of Agribank Customer survey : Customers were randomly chosen from the database of Agribnak customers that have used its services

Methodology to select samples: randomly selected

Time of survey: from March, 2018 to October, 2018 Set up the model:

HDTT: payment activity in Agribank

MD: Purpose of using payment services for customers TN: the income of customers

ML: the network of ATM and POS AT: The safety level while using payment service HL: customer satisfaction level

HC: Disadvantages Sample regression model

HDTT =  0 +  1 MD +  2 TN+  3 ML+  4 AT+  5 HL+  6 HC+ U i Design of the research

After surveying about the theoretical basis, this research would carry on the following steps:

Step 1: Pilot study by qualitative

The content of the experimental interview would be acknowledged and summed up to be used as a basis for further modifying and supplementing or removing the unrelated variable By relying on that, the questionnaire was designed and performed the trial release then had the last modification before official being released as official research

Step 2: Official study by quantitative questionnaire

Evaluating the model by multiplying variable regression was carried out with the significance of 5% All calculations were performed by using Excel with the support of SPSS 16.0 software

The comprehensive (general) rule for the minimum size of sample for the multiple regression was 5 times higher than the number of observed variables This research model was estimated that there would be 20 observed variables, thus, the minimum of sample size was about 100

The convenience sampling method was used to collect the data

The collected data was cleaned, processed and analyzed by using Excel and SPSS 16.0 to process the survey results and analyze the factors, level of impact of each factor on payment Basing on the comments obtained from the results, the suggestions were contributed for developing payment operations at banks

Pilot study was conducted by applying quantitative research, using group discussion technique with 5-10 clients using International credit card, e- mobile banking and QR pay The discussion resulted in removing all questions that were not suitable with the situation of the bank The last ten questions were used to measure the payment activity at the bank

The convenient sampling method was performed for this study 220 questionnaires were distributed to 220 random clients using payment service

Finally, there were 205 questionnaires were returned, reached a total response rate of 93% After collecting and checking, 25 questionnaires were eliminated within 205 questionnaires due to too many blank boxes Therefore, this study had a sample size of 180 a Survey results

Overall, customers are using the payment service of many banks since then other banks also focus on developing the payment service, promoting promotion to attract clients According to this survey, the majority of customers are using services of Vietcombank followed by BIDV and finally Agribank and Viettinbank b Factors analysis (EFA)

The coefficient used in this analysis was Principal Component Analysis with Varimax rotation The criteria for accepting the measurements is when the total variance is equal to or greater than 50%, the KMO coefficient is greater than 0.5 and the variables must be equal to or greater than 0.4

The factor analysis in table below showed that the KMO coefficient 0.608 > 0.5 with the significance level = 0.000 < 0.5, thus proved that the factor analysis was relatively appropriated

Check KMO and Bartlett Kaiser- Meyer- Olkin Measure of Sampling Adequacy 0,608 Barlett‘s Test of Sphericity Approx.Chi- Square 45632

The theoretical model has 6 factors influencing the payment activity at Agribank The regression analysis was done to determine the impact of these

6 factors on the payment activity in the whole system

MD: Purpose of using payment service of customers TN: the income of customers

ML: the network of ATM and POS AT: The safety level while using payment service HL: customer satisfaction level

HC: Disadvantages c Multiple regression analysis

The values of observed variables in each factor were calculated on average to form the corresponding variables for the multiple regression model The model looks like below:

HDTT =  0 +  1 *MD +  2 * TN+  3 *ML+  4 *AT+  5 *HL+  6 *HC Table 1: Results of multiple regression analysis of the model

Model Sum of squares df Standard error of estimation

Legend: a Estimated (row number) MD, TN, ML, AT, HL b Dependent variable: payment activity

Level of signifi cant Sig

HL 0,281 0,051 0,375 5,561 0,000 0,823 1,214 Variable dependencies: Payment activity

With 95% confidence and significance level α=0,05, we see:

In the statistic model table, R 2 =0,527 means that the linear regression is consistent with the data set of 52.7% and the factors with sig 0.05 thus this will not be mentioned in the final model

According to the correlation table, we find out that the independent variables had very small sig The variance inflation factor is very small (less than 10), therefore, these independent variables are not closely related to each other, thus, the hyperbolic multiplication was not available Therefore, the relationship between the independent variables does not significantly influence the explanation result of the regression model

The result of the correlation coefficient table shows that the independent variables have significance level sig

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