Some solutions for developing cashless payment in Agribank Viet Nam = Một số giải pháp phát triển thanh toán không dùng tiền mặt tại Agribank Việt Nam.

ĐẠI HỌC QUỐC GIA HÀ NỘI KHOA QUẢN TRỊ VÀ KINH DOANH - MAI THỊ TÂM SOME SOLUTIONS FOR DEVELOPING CASHLESS PAYMENT IN AGRIBANK VIETNAM MỘT SỐ GIẢI PHÁP PHÁT TRIỂN THANH TỐN KHƠNG DÙNG TIỀN MẶT TẠI AGRIBANK VIETNAM LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH HÀ NỘI - 2019 ĐẠI HỌC QUỐC GIA HÀ NỘI KHOA QUẢN TRỊ VÀ KINH DOANH - MAI THỊ TÂM SOME SOLUTIONS FOR DEVELOPING CASHLESS PAYMENT IN AGRIBANK VIETNAM MỘT SỐ GIẢI PHÁP PHÁT TRIỂN THANH TỐN KHƠNG DÙNG TIỀN MẶT TẠI AGRIBANK VIETNAM Chuyên ngành: Quản trị kinh doanh Mã số: 60 34 01 02 LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH NGƯỜI HƯỚNG DẪN KHOA HỌC: PGS.TS TRẦN NGỌC CA HÀ NỘI - 2019 DECLARATION The author confirms that the research outcome in the thesis is the result of author‘s independent work during study and research period and it is not yet published in other‘s research and article The other‘s research result and documentation (extraction, table, figure, formula, and other document) used in the thesis are cited properly and the permission (if required) is given The author is responsible in front of the Thesis Assessment Committee, Hanoi School of Business and Management, and the laws for above-mentioned declaration i ACKNOWLEDGEMENT Thesis is the result of research of the author for a long time, by my own efforts, the enthusiastic guidance of the Associate Professor Tran Ngoc Ca and contribution of teachers, my colleague First, the author would like to express sincerely and deeply thanks to Associate Professor Tran Ngoc Ca, who has guided, oriented, supported and encouraged the author throughout the research The author would like to express her sincere thanks to the teachers, who have given the author the knowledge to support, the foundation of reasoning needed to study this topic Especially, the contribution and support of the Ha Noi School of Business (HSB) - Hanoi National University, Vietnam Bank for Agriculture and Rural Development - Agribank Finally, the author would like to send deeply thanks to my family, friends who have always supported, encouraged and facilitated the author to complete this thesis Ha Noi, December 25th 2018 Mai Thi Tam ii TABLE OF CONTENTS DECLARATION i ACKNOWLEDGEMENT ii TABLE OF CONTENTS iii ABBREVIATION vi INTRODUCTION CHAPTER 1: THEORETICAL BACKGROUND 1.1 Digital society 1.2 Cash 1.2.1 The history of using cash 1.2.2 Cashless society 1.2.3 Cashless payment in fact 11 1.2.4 Examples of Cashless Societies 12 1.3 Types of cashless payment in the world 13 1.3.1 Cashless Payments Using RFID 13 1.3.2 Mobile Payments 13 1.3.3 Contactless Credit Cards 14 1.3.4 Cheque 14 1.3.5 Demand Draft 15 1.3.6 Online Transfer- NEFT or RTGS 15 1.3.7 E-Wallets 15 1.3.8 UPI Apps 15 1.3.9 Gift Card 16 1.3.10 Aadhaar Enabled Payment System 16 1.3.11 Unstructured Supplementary Service Data 16 1.4 Cashless payment in Viet Nam 16 1.4.1 Customers have to appear to bank sites 17 iii 1.4.2 Customers not need to appear in bank sites 17 1.5 Cashless payment from the view of Vietnam Government: 18 1.5.1 Overall objectives 18 1.5.2 Specific targets 19 1.5.3 Solutions: 19 CHAPTER 2: STATUS OF CASHLESS PAYMENT IN VIETNAM 21 2.1 Introduction of Agribank Vietnam 21 2.1.1 General information 21 2.1.2 Business strategy in the 2016-2020 period with a vision to 2030 23 2.1.3 Agribank network 24 2.1.4 Cultural values 25 2.1.5 Contact information: 27 2.2 Products of cashless payment 28 2.2.1 Personal Cards: 28 2.2.2 Agribank E- Mobile Banking 36 2.2.3 QR PAY 38 2.3 The situation of cashless payment in Agribank in recent years 40 2.4 Results of actual survey research 46 2.4.1 Quantitative research 46 2.4.2 Qualitative in-depth interview research 52 CHAPTER 3: SOLUTION 58 3.1 Recommended solutions to the Government, 58 3.1.1 To Issue a number of policies to encourage electronic payment 58 3.1.2 Promote e-payment in public administrative services 59 3.2 Solutions for implementation by Agribank: 60 3.2.1 Develop cashless payment in rural areas 60 3.2.2 Recruiting and training the staff to meet the increasing demands of the current market, from the perspective the service providers 61 iv 3.2.3 Immediate and Urgent solutions 62 3.2.4 Comprehensive solutions and customer classification 63 CONCLUSION, LIMITATION AND IMPLICATION 67 REFERENCES 70 Appendix 1: Transaction fee for using international card 71 v ABBREVIATION Agribank Vietnam: Vietnam bank for Agriculture and Rural Development VND: Vietnamese Dong ATM: Automatic Teller Machine EDC: Electronic Data Capture POS: Point of Sales PIN: Personal Identification Number ID: Identification Card QR code: Quick Respose Code OTP: One Time Password IPCAS: Internal Payment and Customer Accounting System vi INTRODUCTION Rationale In the development of Technology in the era 4.0 and of modern society, cashless payment is the unavoidable path that we have to reach Nowadays, if you want to win in competition and become well-known in the market, you have to catch the new trend of technogy and apply it to your current business Agribank, with a wide network in Vietnam, is one of the largerst firm and also the largest taxpayment Its main customers are farmers in the rural areas Agribank has reached 2.330 branch and transaction offices located in all 64 province of Vietnam And it also develops impressively in Hanoi and Ho Chi Minh City But the technology does not match with the speed of social development and still seems quite weak compared with other banks Bad debt in Agribank is 49.563 billion Vietnam Dong, about 6.24 % of total debt (2016), which was mainly in Hanoi, Ho Chi Minh City and Western Provinces where we can not compete with other commercial banks With factual statistics about Vietnam economy it can be seen that profits from loan bear many risks On the other hand, revenue from service is just about 20% of our total benefit Developing service is the safer way to increase revenues and decrease risks in the business According to statitstics from the World Bank, Vietnam has the lowest cashless payment, only 4.9% (2017), so that it has many free places to gain the market share We should understand and apply it to our bussiness right now I choose the thesis ‗‘Some solution for developing cashless payment in Agribank Vietnam’’ because this problem is very important and necessary in banking business It also helps our bank to overcome difficulties when the benefit from loan is not good due to bad debt Exploiting in service is the right urgent way that our bank has to change to win the competition with other banks and may also contribute a right path to the development of our society Literature review The thesis of Dang Cong Hoan (2015), ‗‘Promoting cashless payment for residential areas in Vietnam‘‘, Hanoi Economic University - Hanoi National University The topic has assessed the current state of cashless payment service in the residential area of our country, clarifying the role of State policies in promoting and developing payment services In particular, the topic has evaluated the cashless payment to the economy and community according to the time series regression model with the following variables: the ratio of cashless payment/total cash; GDP per capita and total annual state budget, to perform correlative analysis However, this thesis just examines at the macro level in over all According to Bui Thi My Huyen‘s Master thesis: ‗‘completing the cashless payment activity through bank in Ho Chi Minh‘‘ from Ho Chi Minh Economics University (2011), by the scientific quote for cashless payment through banks in comparison with the reality, the subject goes into the argument for the need to promote cashless payments through banks In particular, the topic has addressed the lessons learned in cashless payment activities of some countries that can be applied in Vietnam and the results achieved in the implementation of cashless in Vietnam for the period from the year 2006 to 2010 From researching cashless payment activities in Ho Chi Minh City, the thesis has assessed the current situation, finding out the reasons for the inadequacies and ineffectiveness, and then orient and propose solutions to complete and improve cashless payment via banks in Ho Chi Minh City Agribank should also classify its customers and focus on Gen Y customers, providing E- Mobile Banking services on smart devices instead of Smart Phones Limitations The author wants to mention about time and resources completing the thesis, because the thesis is the result of her self-research, not a group of authors There are limitations of time and resource as well Data used in the thesis were collected from various sources and the author could not collect the latest data because banking is at a large scale, therefore, the collection of latest documents was not easy and it took lots of time Implications A recommendation for further study would be to broaden the research to other commercial banks in order to generalize the study A recommendation would be to conduct the study within a number of different banking systems in Vietnam Future studies should have a larger representative sample to increase the accuracy of the findings Recommendations for further studies would be to also use comparisons of different age groups in the society to determine reasoning behind various perceptions, to uncover the factors behind high usage of cashless payment methods or reasoning for low usage of cashless payment Recommendations to reduce the limitations faced with cashless transactions would be the implementation of higher security standards and a method of necessary identification when using specific cashless payment methods such as contactless The research identified that specific advantages perceived by the participants regarding physical cash were the direct links with precautionary spending An additional recommendation for future studies to find ways to reduce limitations faced with the preferred payment method 68 would be by conducting further research into the methods of financial planning and budgeting This would gain insight to the ways financial satisfaction could be reached through the use of cashless payment methods Further research should uncover ways in which precautionary spending could be achieved with the use of alternative payment methods than physical cash 69 REFERENCES Agribank Financial Statements Audited for the year 2016 and 2017 by Earn & Young Audited Company Limited Decision No 2545/QD-TTg dated 30 June 2016 signed by The Viet nam Prime Minister Ngo Vi Dung (2018), Quantitative and Statistical Research methods, Hanoi School of Bussiness Agribank Cultural Handbook by Agribank 2016 Nguyễn Hữu Tài (2002), Financial and Cash Theory, Statitic Publisher, from Ha Noi National Economic University Le Vinh Danh (1996),“Cash and banking operation ”, Finacial Publisher Frederic S.Mishkin(2015),“the Economic of Money,Banking and financial market” Website: https://www.vnba.org.vn Website: https://www.agribank.com.vn 10.Duong Hong Phuong (2013),Banking Magazine, Ha Noi 70 Appendix 1: Transaction fee for using international card TRANSATION FEE APPLIED FROM 12/5/2018 (Based on Deciosion 1545/QĐ-NHNo-TCKT date 13/9/2017 of Agribank Vietnam GeneralDirector) No Content Visa/Master Debit Card issuance Standard 100.000 VND/each 100.000 VND/each Gold 150.000 VND/each 200.000 VND/each NA 300.000 VND/each Standard 50.000 VND/each 50.000 VND/each Gold 75.000 VND/each 100.000 VND/each NA 150.000 VND/each Standard 100.000 VND 150.000 VND Gold 150.000 VND 300.000 VND NA 500.000 VND Standard 50.000 VND 75.000 VND Gold 75.000 VND 150.000 VND Platinum Card re- issuance Platinum Annual fee a Main card Platinum b Supplement main card Platinum Credit 250.000 VND Card issuance by Agribank and transact in Agribank’s 71 ATM/EDC (on-us) a Transact at ATM Withdraw/ Advance cash 1.000 vnd/transact Transfer money within 0.3% in total Min Agribank 3.000vnd/transact Inter- bank transfer N/A 2% in total Min 20.000vnd/transact N/A Balance inquiry/Credit limit No bill payment print Bill printed free 500 VND/each 500 VND/each Free Free Change Pin Withdraw with code 10.000 VND/transact Renew Card Fee transact free free free free free free Deposit money fee free free Transfer money to 0.3% in total Min saving account 3.000vnd/transact Payment bill fee free Register and cancel service Credit card payment fee b 10.000 VND/ Transaction in POS fee POS in Agribank transaction site 72 NA free in branch differ from open account branch: 0,03% in total Withdraw/ cash advance amount; 5.000 VND/GD; max 500.000 VND/GD 2% in total amount; Min 20.000 VND/ transact - in the opening account bank: free 0,03% in total Transfer in Agribank amount; Min 3.000 VND/GD; Max N/A 3.000.000 VND/GD PIN Change c Free Free Balance inquiry 500 VND/transact 500 VND/transact Print Statement 500 VND/transact 500 VND/transact Agribank Card transact at other bank (not on-us) - At ATM - In Vietnam Boundary: 10.000 Withdraw/ cash advance VND/trans; - outside Vietnam boundary 4% in total; 50.000 VND/GD - At POS 73 4% in total; 50.000 VND/trans In Vietnam In Vietnam Boundary: 4% in Boundary: 4% in total; 50.000 total; 50.000 VND/GD VND/GD outside Vietnam outside Vietnam boundary: 6% in boundary: 6% in total amount; Min total amount; Min 50.000 VND/GD 50.000 VND/GD 10.000 VND/ 10.000 tran VND/ tran Free Free 80.000 VND/each 80.000 VND/each Complaint fee 50.000 VND/each 50.000 VND/each Pin change request 20.000 VND/each 20.000 VND/each 2% in total 2% in total At Agribank’s ATM 30.000 VND/each 30.000 VND/each In other bank’s ATM 100.000 VND/each 100.000 VND/each N/A 50.000 VND/each 10.000 VND/each 10.000 VND/each Withdraw/ cash advance Balance inquiry Payment bill and service Other fees Confirmation base on card holder request Transfer to foreign currency fee Payback card due to ATM hold Change credit limitation/Overdraft level Unlock card fee 74 Delay payment fee N/A 3% in total amount; Min 50.000 VND Register/ cancel Internet/ Moto service fee 30.000 VND/each 75 30.000 VND/each Appendix 2: E- Mobile Banking Service Fee Transfer money + Transaction under 1.000.000 VND: 1.000 VND/GD In Agribank + From1.000.000 VND to under 10.000.000 VND: 2.000 VND/GD + Above 10.000.000 VND: 3.000 VND/transaction Inter- bank 0,05% of total amount; 8.000 VND/transaction 76 Appendix 3: Table of 10 questions designed for the study of five factors affecting payment services: 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 Purpose when you use E-mobile banking, international card and QR Pay a Cash withdraw b Purchase goods ans service at supermarket c Online payment d All e Others From which channel you know Agribank payment service? a Internet, newspaper, magazine b My friend and relative c At Agribank site when I visit How much is your monthly income? a 5-10 million b 10-20 million c over 20 million 77 Please let me know your level of satisfactory about banking services Competely Satisfy Satisfy Not satisfy Completely dissatisfied Many utilities Competitive fee Wide ATM, POS network Promotion news updated frequently Agribank staff are polite and enthusiastic to answer customer complaints Agribank transaction sites are very beautiful and comfortable Card issuance and service register quickly with criteria below: What are the troubles you meet when using Agribank payment services? 78 Never Rarely Sometimes Usually ATM ran out of money No connection with service Deduct money in account without reason Queries are not adequately explained by the bank teller According to you, 8.800 VND fee for each transaction with interbank tranfer a Reasonable b Unreasonable c Should not charge fee For international card, please evaluate the level of importance of these criteria: 79 Not Important Normal Important Interest Rate Issuance and annual fee Other fees (cash advance, delay clear payment fee) Promotion and incentive included Customer Service Confidential Way to connect with bank Others Please evaluate the quality of services when you make transaction with Agribank Completely Satisfy Satisfy Fast, Accurate Service Agri Staff Uniform polite Warmly safe guard 80 Normal Simple and fast procedure Customer service careful (Contract Center, Promotion and gift AGR's website interface is easy to use and effective Many channels of communication between customers and AGR According to you, how many points will you give to evaluate about the quality of services of the branch / transaction office where you regularly traded, supposing the mark is from to 5, ? a b c d e 81 10.According to you, what criteria are attractive to customers? Very important Diversify products and services Convenient and large scale transaction network site Fast, safe and secure transactions Strong brand and prestige Many preferential policies and customer service programs Social Responsibility Beautiful, professional gift Enthusiastic and professional Staff 82 Important Normal