Báo cáo nghiên cứu khoa học: The Potential of Green Credit Card Development In Vietnam: Evidence In Hanoi

Abstract 300 words or less: The purpose of this research is to provide potential and obstacles in thedevelopment of GCC in Hanoi, thereby enhancing green finance, advancing sustainableec

VIETNAM NATIONAL UNIVERSITY, HANOI

- Program: International Business

- Address: My Dinh, Nam Tu Liem, Hanoi

- Phone no /Email: 0869925530/dohongphuccb @ gmail.com

II Academic Results (from the first year to now)

Academic year Overall score Academic rating

III Other achievements:

"Student With Five Good Merits" at City level (Hanoi)

Encouragement of Academic Excellence Scholarship for Semester I Academic Year

2022 — 2023

HTI-VNU "Dreams Soar in Technology" Scholarship Academic Year 2022 — 2023

Advisor(Sign and write fullname)

“oe

Hanoi, April 17, 2024Team Leader

(Sign and write fullname)

Đã Hang Phúc

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LIST OF FIGURES

Figure 1: A research model investigating the purchase intention of Green Products amongW6) 16Figure 2: A research model for factors influencing individual customers' acceptance ofi18) vìi1sg1a2i0)i0sii080) 7n 17Figure 3: A research model for determinants of customers’ intentions towardenvironmentally sustainable bank1ng - + + xxx E9 1 ng ng giết 18Figure 4: Conceptual Framework cccceeccceseseseeescecececeseceseesceceaeeeaeeeeeeceaeeeneeseaeeeaeeeeeees 22Figure 5: Final PLS-SEM model of behavioral 1ntenfIOI - «+ +s<++xc+s+seessss 35

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Phạm Thị Ngọc IB2021C 21070332

3 Advisor(s):

Nguyen Thuy Trang, MSc in Public Policy, Faculty of Economics and Management

4 Abstract (300 words or less):

The purpose of this research is to provide potential and obstacles in thedevelopment of GCC in Hanoi, thereby enhancing green finance, advancing sustainableeconomic development, and limiting environmental impact in the city Specifically, thisresearch considers the indirect relationship between environmental knowledge,environmental concern and behavioral intention through attitude, subjective norms,perceived behavioral control, the direct relationship between environmentalknowledge, environmental concern and behavioral intention This research defined twoindependent variables (EK, EC), three mediating variables (AT, SN, and PB), and onedependent variable (BI) The study’s primary data was collected through a survey with

205 people above 16 years old in Hanoi An extended version of the Theory of PlannedBehavior is constructed in the theoretical framework The PLS-SEM algorithm andbootstrapping are used in this research The result shown that environmental concern

has a positive influence on consumers’ attitudes subjective norms, perceived behavioral

control, and behavioral intention to use GCCs; environmental knowledge does notdirectly affect the behavioral intention to use GCCs, however, it has a positive influence

on attitudes, subjective norms, and perceived behavioral control; attitude toward GCC,

subjective norms, and perceived behavioral control have a positive impact on

consumers’ behavioral intention to use GCCs The paper reinforces on several

context-specific factors that can explain the potential of GCC development through thesupported hypotheses The findings prove that using the extended TPB to examinebehavioral intentions toward GCC is reasonable

Keywords (3 — 5 words)

Green credit card, theory of planned behavior, behavioral intention, PLS-SEM, Hanoi

SUMMARY REPORT IN STUDENT RESEARCH

CHAPTER 1: INTRODUCTION

1.1 Background of the study

Nowadays, environmental pollution causes serious natural changes such asclimate change At the 26th United Nations Climate Change Conference in Glasgow(COP26), Vietnam and nearly 150 countries committed to bringing net emissions to

“zero” by 2050 In addition, Vietnam joined with more than 100 participatingcountries committed to reducing global methane emissions by 2030 compared to2010; 141 countries in the Glasgow Declaration of leaders on forests and the use ofland, and nearly 50 countries participated in the global declaration on transitioningcoal power to green energy

In recent years, the rapid development of the economy and growth in income andconsumption have created great demand for the financial services industry in generaland credit cards in particular By 2023, economic growth was estimated to reach5.05%, besides, GDP per capita is estimated to reach 4,284 USD which has anincrease of 160 USD compared to 2022 (GSO, 2024) Parallel with that is the trend

of sustainable development (SDGs) which is an increasingly popular concern in alldifferent fields, and one of them is finance

In the context of these international commitments, implementing and developinggreen finance can contribute to helping Vietnam reduce environmental pollution(Sadiq et al., 2022) Furthermore, the Vietnamese government is also stronglystrengthening green growth to cope with climate change and develop sustainableeconomic development The Prime Minister approved the "National Strategy onGreen Growth for the period 2011-2020 and Vision to 2050"; and approved the

“Development Strategy for the Vietnam Banking Industry to 2025” on August, 8th,

2018 (Ngoc, 2023)

Currently, even though the world has seen an growth 1n the economy, problem thatmay be among the most concerned the most is sustainable development Therefore, somemethods has been taken to promote sustainable finance, green finance, and supportsustainable lifestyles in developed countries For example, TCM Bank in America issuedthe Green America Visa Card, which a deemed to exert a positive impact on the

environment because a part of what the users spend will be donated to Green America’s

work supporting green businesses, and a clean environment (Huang & Fitzpatrick, 2018).Besides, in England, Barclays Bank issued green credit cards (GCC) to encourage

consumers to purchase the bank’s green products with low-interest rates Barclays Bank

also success to make a positive impact to the environment such as supporting a carbon economy, saving energy, and protecting the environment (Campiglio, 2016; Xu,2020) Another example is Korea which has developed GCC to encourage people to have

low-a sustlow-ainlow-able lifestyle low-and consumption behlow-avior GCC in generlow-al low-are deemed toencourage consumers to take more responsibility for the environment

However, living a green lifestyle is often inconvenient and can even be expensive,people have become accustomed to the modern convenient lifestyle, and changingconsumer behavior is exceedingly difficult Despite these difficulties, this topic needs to

be studied to find solutions to improve green lifestyles and help Vietnam solveenvironmental-related problems

1.2 Research objective

The goal of this research is to identify and evaluate the impact of factors affectingpeople's behavioral intentions toward GCC To achieve the above research goals, weneed to answer and analyze the following questions:

1 What factors affect the behavioral intention of using GCC by people in Hanoi?

2 What potentials and limitations does Hanoi have to apply for GCC?

1.3 Scope of the study

With the rapid development of the financial market in Vietnam and an increasinglycompetitive business environment, research on the potential for GCC development inVietnam, especially in the capital Hanoi - which is considered one of the key economicdevelopment points in Vietnam, becoming extremely important The topic “THEPOTENTIAL OF GREEN CREDIT CARD DEVELOPMENT IN VIETNAM”

is researched in Hanoi for many reasons Firstly, Hanoi is a densely populated placeand is a gathering place for people from all parts of Vietnam to come to study andwork, therefore, research in Hanoi can collect the most objective results Second,surely the environment in Hanoi will suffer more damage because of crowdedcitizens, hence, Hanol is an ideal place to research the potential of GCC For instance,the number of people is proportional to the number of vehicles, leading to moreemissions Another example is in the summer, the hotter the weather is, the more airconditions are used, and this can lead to global warming This research can providevaluable information on consumption trends, consumer awareness, and the necessaryfactors to promote the transition to a more sustainable and greener payment system

in Vietnam

1.4 Significance of the study

Hanoi is one of Vietnam's key economic regions, so it has many problems withpollution, climate change, and aiming for sustainable growth The research projectaims to improve this problem in both research and practice The development of theGCC promotes a green lifestyle, which is a tool to encourage sustainableconsumption behavior This is a potential green financial product that contributes topromoting commitments to sustainable development set forth by the government.Therefore, GCC needs to be further researched and developed in Vietnam

Using GCC has many benefits such as changing people's consumption habits,raising awareness about green consumption encouraging society to gradually change

to be "greener", accelerating banks to achieve sustainable development, and reducingcredit risks Moreover, GCC contributes to helping commercial banks diversifyproducts, creating competitive advantages to meet the green banking trend Inaddition, understanding the development potential of the GCC will help banks offerbusiness solutions suitable to Vietnam's current context As a result, if GCC is developed

in Vietnam, specifically in Hanoi, this will positively influence our country's economicmodel from “brown” to “green”

CHAPTER 2: LITERATURE REVIEW

2.1 Theory base

2.1.2 Credit card (CC)

Issued by commercial banks, CC is a card that allows the cardholder to make cardtransactions within the credit limit granted as agreed with the card issuer CC allows

cardholders to temporarily use the banks’ money within a certain limitation to pay for

goods and services (SBV, 2016) Whenever cardholders borrow money from a creditcard, they must agree to repay the amount they use within a certain time at an agreed-upon fee or interest rate

CC is a convenient tool for conducting transactions When used properly, it canenhance the credit score of the cardholders If the customer has big plans in the futurethat need to borrow capital such as buying a house, buying a car, or starting a business,the bank will rely on this credit score to decide whether to approve that loan, at a

reasonable rate (Huyén, 2021).

It also makes purchasing easier and spreads costs over a lengthy period Customerscan follow all their spending through all transactions recorded In addition, Dao (2022)showed that payment via CC is also very convenient, helping customers transfer money

to each other quickly in all cases

Nowadays, people often tend to use credit cards instead of cash because of theirconvenience Many factors influence the decision to use non-cash payment methods

First, convenience, speed, and ease of payment are contributing factors to this trend.Second, the security of CCs is another important aspect with extremely high security.Instead of carrying a sum of money, consumers only need a card In addition, CCsalso offer many incentives for consumers (Lan, 2023) For example, in early 2024,Vietinbank offered promotions for users such as “Get up to 50% off’, “Free

shipping”, or “Vietinbank Premium with classy resort privileges to Platinum and

Diamond priority customers” According to data from the State Bank, non-cashpayment indicators have grown quite well In January 2024, non-cash paymenttransactions increased 63.3% in quantity and 41.45% in value compared to the sameperiod in 2023 (Thuy, 2024)

2.1.2 Green credit card

A GCC is a new type of credit card, but there is a slight difference in theoperating mechanism GCC's operating system is to accumulate points in the form

of green points and those points will be converted into rewards for consumers Whenconsumers use GCC to buy environmentally friendly products, they will receiveaccumulated reward points (Escap, 2012) These points can be converted into money,and discounts; or the bank will donate that money to an environmentally friendlynon-profit organization from their spending For example, customers can accumulategreen points when they save on living expenses - the costs of using utilities such astap water, electricity, and gas heating In addition, when they use publictransportation or prioritize buying and using green products is another way to achievegreen points (Escap, 2012)

GCCs have created and nurtured a market for low-carbon products and services,thereby contributing to ecological innovation, environmental protection, and thetransition to a low-carbon economy The program is in the form of accumulatingEco-money points, which benefits customers when purchasing low-carbon productswith credit or debit cards or participating in energy savings (MY, 2016) To illustrate,when customers buy bicycle insurance, the insurance premium will be reduced

because this is an environmentally friendly activity, or when customers intend to buyenvironment-friendly products such as low-carbon vehicles, there will be a personalloan

Furthermore, GCC holders can enjoy additional incentives when using publicfacilities (such as parks and public transportation) (Institute, 2015) Some countries havelaunched GCC programs intending to foster more sustainable lifestyles by providingconsumers tangible economic rewards who adopt sustainable lifestyle models Inactuality, Korea launched GCCs in July 2011 and had 18.48 million users as of 2018(Escap, 2012)

2.2 Research problem theory

we conducted this research on the development potential of GCC in Vietnam in thecontext of Hanoi city

2.2.2 Theoretical framework

In the first chapter, the research team has highlighted the purpose and significance

of this study in exploring the intention to use green credit cards To achieve thisobjective, the study needs an appropriate theoretical framework to guide the datacollection and analysis process

2.2.2.1 Theory of Planned Behavior

Theory of Planned Behavior - TPB is a theory in the field of psychology andbehavioral science developed by Scottish human psychologist Ajzen (1991),developed from the theory of rational behavior (Ajzen & Fishbein, 2000) This theorystates that actors’ intentions are the most crucial factor in predicting their behavior,showing the relationship between someone's beliefs and behavior The authorbelieves that the intention to perform a behavior will be influenced by three factors(1) attitude toward the behavior, (2) subjective standards, and (3) perception ofbehavioral control

There are very few previous studies that have mentioned environmental concernand environmental knowledge even though they are important factors that influencebehavioral intention for using GCC (Paul et al., 2016; Yadav & Pathak, 2016).Customers who have an extremely high concern about the environment tend to havestronger intentions for using and adopting GCC (Huang & Fitzpatrick, 2018).Besides, environmental knowledge can provide consumers the general concepts andknowledge, therefore, this can lead to sustainable development (Maichum et al.,2016) Having environmental knowledge significantly affects customer behavior

such as buying green products and using green services (Nguyễn et al., 2022), this

may affect the potential for green credit card development For these reasons, thisstudy utilizes the TPB model with two added factors (EC and EK)

2.2.2.2 Extended Theory of Planned Behavior

Research on Thai consumers’ green product purchase intention was conducted,and the study applied the extended TPB model (Maichum et al., 2016) The researchsubjects are Thai consumers over 18 years old and have a secondary schooleducation

Research results show that environmental concern has a noteworthy influence

on attitudes, perceived behavioral control, and intention to purchase green products,but has no influence on subjective norms (Maichum et al., 2016) Environmental

knowledge does not have a direct impact on the intention to purchase green products buthas an indirect impact through attitudes, subjective norms, and perceived behavioralcontrol (Maichum et al., 2016)

0.461***

Attitude

towards Purchasing Green Products

Environmental

Concem

0.562***

Purchase Intention for

Green Products

Subjective Norm

Figure 1: A research model investigating the purchase intention of Green Products

among Thai Consumers

Source: (Maichum et al., 2016)

A few years later, factors influencing individual customers' acceptance of greenbanking services were conducted in Hanoi City (Lan & Anh, 2023) Exploratory factoranalysis (EFA) and Multiple Regression Analysis are used, based on two theoreticalmodels: the Technology Acceptance Model - TAM and the Theory of Planned Behavior(TPB) in the research The research identified six independent variables: PCE (Perceivedusefulness), PEU (Perceived ease of use), COL (Influence of the social community),AGB (Attitude when using green bank services), PEC (Environmental concern), TIB(Trust in banking) and a dependent variable (IU): Acceptance behavior of using greenbanking services

PEC factor has the strongest influence on the behavior of accepting green bankingservices of individual customers in Hanoi City (Lan & Anh, 2023) Next are PCE, COL,and AGB, all of which have a significant impact on customers' behavior of using greenbanking services in Hanoi Finally, COL has a positive impact on the behavior ofaccepting green banking services If the method of implementing green banking services

is simple and easy to implement, customers will choose to use green banking services

PCE me)

PEU (|=

COL aly

-men - IU AGB xvỶ

PEC |”

Tp 1”

Figure 2: A research model for factors influencing individual customers' acceptance of

green banking services in Hanoi City

Source: (Lan & Anh, 2023)

The relationship between green credit card service evaluation, overall satisfactionwith green credit card service, and green credit card loyalty is conducted in Korea (Kim,2021) In which, evaluation and overall satisfaction with green credit card services is theindependent variable and loyalty to green credit cards is the dependent variable Inaddition, this study examines whether environmental ethical awareness - people's self-conscious awareness of nature, of their position and role concerning nature, and ofresponsibility, and whether the consumer's obligation to consciously manipulate thatrelationship moderates the relationship between green credit card service evaluation andgreen credit card loyalty

Kim (2021) shows that evaluating green credit card services has a positive impact

on both overall satisfaction and loyalty to green credit card services Overall satisfaction

Perceived Environmental

Outcomes

Environmental Consciousness

Attitude

Behavioural

Intention

Perceived Behavioural

Control

Subjective Norms

Figure 3: A research model for determinants of customers’ intentions toward

environmentally sustainable banking

Source: (Taneja & Ali, 2021)

H2: Subjective norm has a positive influence on behavioral intentions for GCC.

Perceived behavioral control is the perceived ease or difficulty of a person inperforming a certain action (AJzen, 1991) Hùng et al (2018); Maichum et al (2016)have shown that perceived behavioral control positively impacts people's greenconsumption intention

H3: Perceived behavioral control has a positive influence on behavioral intentions forGCC

Green literacy has a positive influence on attitudes toward green credit card services(Kim & Son, 2021) Consumers’ green knowledge is a factor that affects the purchase,use, and consumption of green products (Ali et al., 2015) Thus, customers’ green

H5: Environmental knowledge has a positive influence on subjective norms.

Having knowledge will also make a person increase their awareness of their ability

to Perceive behavioral control (Kim et al., 2014) Environmental knowledge is a distantpredictor of environmental behavior (Kaiser & Fuhrer, 2003), which means when aperson knows the environment, they will perform positive actions to the environment

Hồ: Environmental knowledge has a positive influence on Perceived behavioral control

Environmental knowledge plays an important role in customers’ environmentallyfriendly purchasing intentions (Indriani et al., 2019) Consumers become moreknowledgeable with increased environmental knowledge, thereby increasing purchaseintention (Lee et al., 2012) However, Maichum et al (2016) found that environmentalknowledge did not create any positive motivation related to the reason for purchasinggreen products

H7: Environmental knowledge has a positive influence on the behavior intention forGCC

Environmental concern is the degree to which people are aware of environmentalproblems and are willing to make personal contributions to solving them (Wu & Chen,2014) Customer attitudes towards green product services and environmental concerns ofcustomers have a positive relationship in Tra Vinh (Hòa & Anh, 2023) Along with that

HO: Environmental concern has a positive influence on subjective norms.

The relationship between environmental concern and positive influences onattitudes, subjective norms, and perceived behavioral control (Paul et al., 2016) Someresearch articles also show that concern for the environment affects perceived behavioralcontrol (Hoa & Anh, 2023; Salimi, 2019; Tseng & Lee, 2020)

HI0: Environmental concern has a positive influence on Perceived behavioral control

Environmental concern is an important factor in consumer decision-makingaccording to Diamantopoulos et al (2003) People's behaviors of buying and using greenproducts and services have a significant positive impact due to Salimi (2019) Mostafa(2009) points out that environmental concerns are among the main variables thatinfluence consumers' intention to purchase green products

HIT: Environmental concern has a positive influence on the behavior intention of GCC

This theory has been used in Maichum et al (2016); Taneja and Ali (2021) toexamine and study the motives of customers’ behavioral intentions and has been proven

by Stern (2000) to be highly applicable in the field of environmental psychology GCCdevelopment is a relatively new field in Vietnam The model extending the concept ofplanned behavior will help explain factors that can influence customers’ behavior for

GCC, from attitude towards green credit card services, subjective norm, and perceivedbehavioral control

Environmental knowledge

7 Attitude towards using GCC

Figure 4: Conceptual Framework

Source: Authors proposed

2.3.2 Research Methodology

The quantitative method is used to collect raw information, and questionnaires areused to survey research subjects This method eases access and collect the informationmore efficiently and efficiently, and it can reduce the risks while copying data

The research team investigated people who are studying, and working in Hanoi city

- where there is a dense population, suffering more harm to the environment, modernpeople's lives and having more access to financial services The respondents wererandomly selected at all ages, genders, education levels, marital status, and income levels.The research team uses the method of random sampling, conducts online surveys throughGoogle Form, and sends survey links to subjects living, studying and working in Hanoi.This survey is implemented online, questionnaire is set up consisting of 4 parts The firstpart related to demographics to provide basic information from the surveyor, includingage, gender, occupation, and income The second part is about survey participants’

awareness of green finance The third part is their awareness of GCCs The final part is

to collect people's opinions on the potential of the application and development of greencredit cards in Vietnam With this type of survey, Google Forms is chosen as the tool forbringing the survey to research subjects

CHAPTER 3: STUDY METHODS

3.1 Data collection

3.1.1 Sample selection method

The sample size will depend on the analysis method, Hair Jr et al (2014) haveshown two 10-fold rules, which aim to figure out the smallest sample in PLS-SEM,specifically with the first rule requiring a minimum sample to be 10 times the number ofobserved variables of a causal scale structure with the most observed variables In themodel, the demographic variable has the most observed variables (5 observed variables)then smallest sample of the model will be 50 With the second rule, the sample will be atleast 10 times the number of impact paths directed at a scale structure with the mostguides directed at it However, in the model, all scale structures have only one arrowpointed in Thus, the rule of 10 times will apply, and the minimum sample of the modelwill be 10 Considering the two smallest sample sizes, the sample size according toformula number one is larger, so we choose the smallest sample of the model as 50 Thus,

206 sample is eligible to conduct factor analysis and representative of the study

3.1.2 Data collection methods - Investigation through questionnaires

3.1.2.1 Questionnaires developing

The research team collected quantitative data through a set of questionnaires tosurvey the level of understanding, behavior and attitudes of people, thereby assessing thepotential of GCC development The questionnaire is developed and processed in thefollowing sequence: Step 1, figure out the structure by the structural construction of thequestionnaire can be done in two methods, interpretive or inductive (Spector, 1992) The