In Hanoi, on August 24, 2018, the workshop on strengthening payments for public services via banks was organized by the Lao Dong Newspaper in collaboration with the Payment Department and the Communication Department of the State Bank of Vietnam (SBV).
Attending the workshop were Dr. Bui Sy Loi, Deputy Chairman of the Committee for Social Affairs of the National Assembly, SBV Deputy Governor Nguyen Kim Anh and representatives from the SBV entities, representatives from the Lao Dong Newspaper and the relevant ministries and agencies, such as the Ministry of Labor, War Invalids and Social Affairs, the Ministry of Health, the Ministry of Education and Training, the General Department of Vietnam Customs and the General Department of Taxation, Vietnam Social Insurance, the Electricity of Vietnam Group, Vietnam National Payment Joint Stock Company (NAPAS), representatives of a number of commercial banks and numerous media reporters.
It is necessary to accelerate payments for public services via banks
According to the representative of the Lao Dong Newspaper, the specific quantitative target with regard to payments for public services to 2020 was set in Decision No.1726/QD-TTg approving the Scheme on improving the access to banking services for the economy, and Decision No.241/QD-TTg dated February 23, 2018 of the Prime Minister approving the Scheme on promoting payments for public services via banks. Although the Government has made specific proposals and achieved initial encouraging results, there are still many limitations with the payments for public services via banks.
Deputy Governor Nguyen Kim Anh delivers his opening speech
In his opening speech, SBV Deputy Governor Nguyen Kim Anh stated that Scheme 241 was designed to promote payments for public services and social security via banks, thus contributing to the establishment of an electronic government, high accessibility of banking services of the economy and the development of non-cash payments. Scheme 241 has identified the following targets toward 2020: 80% of tax transactions in the centrally-controlled cities and provincial cities will be conducted via banks; 70% of the electricity bills in cities, urban districts, provincial towns and the centrally-controlled cities will be paid via banks; 50% of households and individuals in big cities will pay their water bills via banks; 80% of students at universities and colleges will pay their tuition fees via banks; 50% of hospitals in major cities will accept hospital fee payments via banks; and 20% of social security payments will be made via banks.
The SBV Deputy Governor emphasized that the SBV has researched and coordinated closely with the relevant ministries and agencies to develop appropriate mechanisms, policies and programs to promote non-cash payments in general and payments for public services via banks in particular; at the same time, the SBV has instructed credit institutions to invest in infrastructure, research and development of diversified products and payment services, improving connectivity with the relevant agencies (the General Department of Vietnam Customs, the General Department of Taxation, Vietnam Social Insurance, the Electricity of Vietnam Group, hospitals, etc.) with the aim of better meeting the needs of customers in payment for the public services.
In addition to payments for public services by traditional methods based on of paper bills, there are new, modern and easy-to-use payment options for customers, such as automatic debiting services, card payments, transactions through ATMs, POS, internet banking, mobile banking, e-wallet, etc. However in practice, the payments for public services via banks are still limited; the scope of implementation has been mainly focused on groups of customers who are organizations, enterprises or in big cities and provinces. To facilitate the implementation of the Government's guidelines, the workshop aimed to provide opportunities for public service providers, product and payment services providers, the management bodies to discuss the situations of payments for public services, thereby identify the shortcomings as well as difficulties, obstacles and specific barriers and together work out measures in order to remove those obstacles and issues, contributing to the promotion of the payments for public services via banks, and implementing Scheme 241 effectively.
An overview of the workshop
Current situations, legal framework and mechanism of payments via banks
At the workshop, the participants discussed the following topics: Current situations of payments for public services via banks; situations of payments for pensions and social benefits; the implementation results, lessons learned in the payments of electricity bills.
Mr. Pham Tien Dung, Director General of the Payment Department of the SBV speaks at the workshop
Mr. Pham Tien Dung, Director General of the Payment Department of the SBV analyzed the situations of public service payments via banks, orientations and solutions to overcome the limitations. He shared that the policy on payments for public services via banks was already mentioned in Decision No.1726/QD-TTg approving the Scheme on improving the access to banking services of the economy and Decision No.241/QD-TTg approving the Scheme on accelerating payments for public services via banks. In addition, the Government’s decrees and regulations clearly stipulate that the payments for public services should be made via banks. He said that up to now, 50 banks have coordinated with the General Department of Vietnam Customs and the General Department of Taxation to collect tax online in all 63 provinces and cities, and 768 districts nationwide; 26 banks have collaborated with power supply companies to provide payment services for power consumption nationwide; 26 banks have coordinated to collect water-use payments in more than 20 provinces and cities; 11 banks have coordinated to collect tuition fees, most of which is conducted at universities; 6 banks have coordinated to collect medical expenses for a few big hospital; 5 banks have coordinated to pay pensions, social insurance benefits.
Mr. Pham Thanh Du, Deputy Director of Finance and Accounting Department of Vietnam Social Insurance, said that since March 2012, Vietnam Social Insurance in coordination with Vietnam Post Corporation have carried out the pilot payments of pensions, social insurance through the postal system in 12 provinces and centrally-controlled cities. However, there have been some disadvantages when implementing this model. He cited that in big cities, the payment points are mainly rented, the staff are not well informed and timely updated on the policy provisions, and therefore complaints and comments from the beneficiaries have not been explained promptly.
Mr. Nguyen Quoc Dung, Head of EVN's Electricity Business Department, said that EVN now allows many forms of payments for power consumption, such as through transaction counters, collection points, collection at home... According to EVN, the ratio of electricity bills and revenues collected via banks and intermediary organizations has increased dramatically over the years, while the ratio of electricity bills collected at the collection points has declined sharply.
On the banks’ side, Ms. Tran Thi Hong Anh, Director of Center for Product Development and Marketing of VietinBank, said that despite many encouraging results, the implementation of payment services with public service companies (electricity, water, television…), public administrative units, non-productive units, corporate customers within Vietinbank has faced many difficulties, such as the habit of using cash, lack of specific guidance for state administrative agencies to open accounts at the commercial banks; no specific guidelines to regulate the relationship between the intermediary organizations (hospitals, schools ...) in the cooperation with the card issuers ...
A number of solutions to promote payments for public services via banks
To overcome the limitations and promote payments for public services via banks, the participants proposed some solutions as follows:
First, continue to develop the legal framework
Mr. Pham Tien Dung, Director General of the Payment Department, suggested that it is necessary to develop the legal framework and policies on payments via banks, continue to fulfill the task of ensuring security and safety in payment activities; apply more advanced forms and modes of payments via banks, which are suitable to the payment characteristics of each type of public services. At the same time, it is also necessary to expand cooperation among public service-providing units and banks and payment solution providers; speed up the connection and exchanges of data and information between the public service-providing units and the banks; strengthen the guidance of the ministries, agencies and People's Committees in the implementation of payments for public services via banks.
According to Mr. Bui Sy Loi, the banking sector should continue to update and apply advanced measures to ensure the security and safety of the payment systems, the payment services and products, and at the same time enhance the supervision of the management bodies and the coordination between banks and relevant units in the tasks of ensuring security and safety. The banking sector should continue to regularly inspect, review, supplement and finalize the internal operational procedures and regulations on security, IT system security of the public service providers in order to minimize risks.
Mr. Nguyen Dinh Chuc, Deputy Editor-in-Chief of the Lao Dong Newspaper, assessed that the legal system regarding payments for public services via banks has been developed but not yet complete. In the coming time, the authorities should improve the legal framework, ensuring the payments for public services via banks. Finally, the infrastructure for public service payments via banks has to be strengthened. The promotion of the infrastructure will help modernize the forms of payment, meeting the increasing demands of the society and the people.
Second, upgrade the technical infrastructure in the supply of payment products and services for public services
Mr. Nguyen Dang Hung, Deputy General Director of the National Payment Corporation of Vietnam (NAPAS), said that NAPAS is working with the online banks, the public administration units to build an infrastructure so that people can easily and quickly pay online via the internet or through their smart phones. From this infrastructure, people can pay through the transaction channels of banks, payments through the channel of payment deposits in the coming years. Currently, NAPAS is implementing ACH system to support the introduction of new, modern, and more affordable payment methods. He expressed hopes that the Government and the functional agencies would promulgate more incentive policies, synchronize the infrastructure and the information technology systems for the centralized data management, assign clear tasks and responsibilities to the focal points in the public service units, and to coordinate with NAPAS and the commercial banks in this area.
Ms. Tran Thi Hong Anh, Director of Product Development and Marketing of VietinBank recommended that the relevant ministries and agencies strengthen the communication activities and adopt mechanisms to encourage the people and enterprises to enhance the use of non-cash payment services, improve the legal framework for cooperation with banks in the development of non-cash payments and gradually upgrade the technical infrastructure of public service providing units.
Mr. Nguyen Nam Lien, Director of the Planning and Finance Department of the Ministry of Health, said that the Ministry of Health is very interested in promoting non-cash payment services. According to the statistics of the Ministry of Health, every year this Ministry collects about VND 100,000 billion from hospital fees, of which the amount of hospital fees paid in cash is very large. Therefore, the Ministry of Health is ready for reforms to strongly implement the Government's directive. He suggested that there should be a clear system to help people pay hospital fees by ATM cards. In order to promote non-cash payments, the hospitals must have a good information technology infrastructure while state investments in hospitals are very low. Therefore, he recommended that the SBV should coordinate with the Ministry of Health to make recommendations to the Government on allowing the transfers of hospital fees and health insurance money to banks so that the hospitals can be more active in collecting and spending. The system should also be synchronized so that it is more comfortable and convenient for the people in the payment process.
According to Mr. Nguyen Dinh Chuc, Deputy Editor-in-Chief of the Lao Dong Newspaper, the infrastructure for public service payments via banks must be strengthened. The promotion of the infrastructure will help modernize the forms of payment, meeting the increasing demands of the society and the people.
Third, enhance the tasks of information and financial education
Ms. Le Thi Thuy Sen, Deputy Director General of the Communication Department of the SBV cited an example of the number of two billion, which reflects the number of people in the world who do not have access to financial services. This is also the amount of money saved in India when this country switched from cash payments to payments via bank for cooking gas services. According to Ms. Sen, the SBV Communication Department has implemented many communication programs to improve the understanding, the habits and the behaviors of the financial service users. She mentioned such programs as “Smart Money” and “Smart Kids”. She shared that the Communication Department has focused on the rural areas where there is less financial information in order to change the habits of using financial services in these areas, where 70-80 percents of the country’s population resides. The goal is to change the habits, the behaviors, and create good practices in the society, focusing on young people. The SBV Communication Department has also focused on studying the international experience, the population characteristics, and the habits to implement its projects. In addition, together with the efforts of the SBV, it is necessary to have the support and coordination of the relevant entities with regard to payments for public services via banks in order to achieve the goal of comprehensive development of the society.
Ms. Le Thi Thuy Sen, Deputy Director General of the Communication Department of the SBV speaks at the workshop
According to Mr. Bui Sy Loi, it is necessary to step up the dissemination of information in a wide variety of forms which are suitable to the characteristics of each target group, area and region, especially the remote and rural areas, in order to improve the access to banking services and payment services in the economy, promote non-cash payments; at the same time, improving awareness, responsibilities of public service providing units and the people in the implementation of payment transactions via banks. Simultaneously, the relevant ministries, agencies and the local authorities should closely coordinate with one another to formulate and finalize the mechanisms and policies on promoting the payments for public services via banks.
Mr. Nguyen Dinh Chuc, Deputy Editor-in-Chief of the Lao Dong Newspaper, observed that there were three core topics at this workshop, including the awareness of the people in the payments for public services via online banking. Therefore, the authorities, and the media should widely disseminate the information so that the people can better understand the benefits of payments for public services via e-banking.
The workshop attracted the active contributions and ideas among the participants. By assessing the current situations of public service payments in Vietnam, the models that have achieved certain success in non-cash payments for public services, the participants proposed several solutions to overcome the difficulties in order to promote the payments for public services via banks, contributing to the implementation of Decision No.241/QD-TTg approving the Scheme on accelerating payments for public services via banks. In addition, the workshop also proposed solutions to apply the technology to promote non-cash payments at the commercial banks.
Le Hang