Evolution of cashless payment: the case of Vietnam Open Access

The rapid growth of technology expedites the digitalization process in all aspects of society, and the financial industry has experienced one of the most significant shifts. Digital transformation is a crucial driver of financial inclusion (Mavlutova et al., 2022), emphasizing how individuals and institutions change how they interact with money. A prominent result of this transformation is the rise of cashless payment systems, alternatives to traditional payment systems reliant on cash, allowing customers to use cards or digital devices to process payment transactions. The implementation of these cashless payment systems is developing extensively by conventional banks and new market players, including financial technology (Fintech) or information technology (IT) firms. Gorshkov (2022) describes a cashless economy as one in which the barriers to cashless payments are absent and the market participants, such as governments, businesses and their customers, clearly understand the benefits of non-cash transactions. Ng et al. (2021) refer to cashless payments as digital transactions instead of physical cash transactions. Balakrishnan and Shuib (2021) define a cashless society as a Fintech transformation aligned with the Fourth Industrial Revolution, where digital cards or electronic devices conduct purchase transactions. Fortunati (2006) claims that mobile payment signals a shift from money as a storehouse of labour to money as an equivalence of phone communication time. Meanwhile, Fabris (2019) believes that the evolution of cashless payment is the next logical step in the history of money.

The implementation of cashless payment started in Sweden in 1919, and this nation is also a successful case study for the move towards a cashless payment system (Ng et al., 2021). Besides, Finland, China, the UK and Australia are also successfully shifting towards cashless societies. According to data from Statista, the value of digital transactions was approximately US$5.33tn globally in 2020, growing to US$10tn in 2023 and is expected to reach US$16.62tn in 2028. The COVID-19 pandemic accelerates this process because of the flourishing of e-commerce due to the lockdown (Gorshkov, 2022). At the same time, a report by McKinsey & Company (2023)shows that digital platforms facilitate 73% of bank transactions. Hence, they expect the revenue growth of the Fintech industry to be three times faster than the growth of the traditional banking sector between 2023 and 2028. As a result, Fintech unicorns and big players in the industry like Tencent, Facebook, Google and Apple have entered the digital payment market.

In Vietnam, the move towards cashless payment began in 1994 with Decision No. 22/QĐ-NH1 on the guidance for cashless transactions. At the end of 2016, the Prime Minister released Decision No. 2545/QD-TTg, approving the scheme for developing non-cash payments in Vietnam during 2016–2020. Subsequently, in March 2021, the Prime Minister published Decision No. 316/QD-TTg on approving the pilot implementation of telecommunication accounts to pay for low-value commodities and services. Most recently, the government has urged the financial digitalization process with detailed objectives and solutions in Decision No. (1813)/QD-TTg dated October 28, 2021, to approve the scheme for developing non-cash payments in Vietnam from 2021 to 2025. These efforts signal strong governmental intent but raise a crucial question: How effectively has Vietnam transitioned to a cashless payment ecosystem compared to its ASEAN peers? What structural, technological and institutional factors influence this adoption?

Although the Vietnamese government has made straightforward strides in promoting non-cash payments, existing literature shows that research in this area is still limited and fragmented. The studies on this topic, however, are limited in number. Many scholars pay attention to the micro-level determinants, such as the factors affecting consumer intention to use non-cash payment (Dinh et al., 2018; Dinh, 2024; Phan et al., 2020; Wang et al., 2023) or on the macroeconomic link between the cashless economy and economic growth (Khuyen, 2024; Tran and Wang, 2023). Meanwhile, other scholars explore niche contexts, such as Luan et al. (2023) study the access to credit and cashless payments for community-based tourism household-owned businesses in Northwestern Vietnam or Dieu et al. (2023) identify factors affecting the intention and adoption of cashless payment among Vietnamese youths. Notably, the analytical framework of Ng et al. (2021) – which evaluates the implementation environment, payment innovation and infrastructure readiness – has been applied to several developed countries such as Germany, Japan and Sweden. This framework has also evaluated the adoption among ASEAN countries, including Thailand, Singapore and Indonesia but excludes Vietnam. This omission highlights a clear research gap: the need for a structured evaluation of Vietnam's readiness and performance in adopting cashless payments compared to other ASEAN economies.

Hence, this paper addresses the gap by pursuing two main objectives. First, we comprehensively compare the evolution of cashless payment between Vietnam and other ASEAN nations based on statistical data from various sources. Second, we assess the adoption of the cashless payment solution in Vietnam based on the three pillars proposed by Ng et al. (2021), including the implementation environment digitalization, the novelty of payment technology solutions and the status of national infrastructure.

Our paper contributes to the literature in several ways. First, it compares various phases of cashless payment implementation in Vietnam and other countries in the ASEAN region. This region has witnessed a surge in the adoption of digital payment thanks to the development of a robust digital infrastructure. A report by Yoolim (2021) shows that this area is the fastest-growing mobile wallet market globally. According to Tsubasa Suruga (2013), Thailand and Vietnam were among the top three countries (together with Japan), with the highest in-person cash transaction value in Asia at 56 and 47% of the total value, respectively. After a decade, according to FIS Worldpay (2023), Thailand, the Philippines and Japan are the leading countries that use cash as a vital payment tool. The value of cash transactions in these countries is 46%, 44% and 41% of the POS transactions value, respectively. Therefore, it is necessary to understand the adoption and evolution of a cashless society in ASEAN. Second, this paper evaluates the readiness and the sustainability of cashless payment solution implementations in Vietnam by considering the three pillars introduced by Ng et al. (2021). These scholars assess the three pillars in four developing and four developed countries. Thailand, Indonesia and Singapore are ASEAN countries under their investigation, but Vietnam is not covered. Based on our analysis, we suggest that the necessary policies to sustain the adoption of non-cash payment systems in Vietnam be devised.

The remainder of this paper is structured as follows. Section 2 reviews the relevant studies on cashless payment worldwide and in Vietnam. Section 3 describes the data and methodology. Section 4 compares the implementation of cashless payment in Vietnam and ASEAN countries. Section 5 analyzes the readiness and the possibility of successful cashless payment solution implementations in Vietnam. Section 6 discusses the results. Section 7 concludes.

The adoption of this payment system has become increasingly significant in modern economies. Numerous studies have shown the advantages of cashless payment, including enhancing the efficiency of transactions, improving the security and transparency in transactions and contributing to economic growth. The first advantage, one of the most significant benefits of non-cash payment, is the reduction in transaction costs. According to Humphrey et al. (2006), this new payment technology can help banks in 12 European countries reduce their operating costs by 32 million dollars, equivalent to 0.38% of the GDP of 12 nations. They can also improve remote payment access, reduce the queue and save individuals' time (Akinola, 2012; Mallat, 2007).

The second advantage of non-cash payment is improving security and transparency in transactions. According to Fabris (2019), switching to a cashless economy improves transaction security and quality and reduces transaction costs related to money circulation. When more people adopt cashless payment, it means that they tend to hold less physical cash when they go shopping. Therefore, this payment method can also help fight against the shadow economy (Schneider, 2017) and illegal activities such as money laundering (Rogoff, 2017), terrorism, illegal immigration and corruption (Olusola et al., 2013).

The third benefit is boosting economic growth. Capgemini (2018, 2019) shows that cashless transactions boost the annual GDP by 3%. Furthermore, non-cash payments can eliminate geographical and temporal barriers, enabling users to execute transactions instantly and remotely, which improves economic productivity. By analyzing 31 provinces in China, Song and Appiah-Otoo (2022) demonstrate that the innovation in payment systems drives stronger connections among consumers, businesses and financial institutions and the overall efficacy of non-cash transactions in boosting economic activity is significantly enhanced. According to Ferra and Ajija (2023), non-cash payment transactions in five ASEAN countries, including Malaysia, Indonesia, Singapore, Thailand and Vietnam, directly affect economic growth as measured through GDP.

Despite the benefits of cashless payment to society, people still insist on cash transactions, in both developed and developing countries, for several reasons. In developed countries, security and privacy are barriers, resulting in 46% of European citizens refusing to switch to non-cash transactions (Nielsen, 2016). Dimitrova et al. (2021) researched Swedish bank customers, and the results demonstrate that consumers feel a lack of privacy in digital payments compared to cash transactions. Therefore, privacy concerns are a significant obstacle affecting the adoption of cashless payment. Moreover, in these advanced countries, the system is already well-established, and there is less demand for change and more concerns about privacy issues and data protection. Furthermore, citizens in advanced countries do not widely accept mobile payments due to users' habits of utilizing credit cards and their rational and risk-averse behaviour (Ye et al., 2023).

On the other hand, the adoption of cashless payments has been hindered not only in developed economies but also in developing countries. Gorshkov (2022) explains that the differences in financial development cause the more rapid growth of cashless payments in developing countries, even though the financial regulations for adopting technology are flexible and supportive. According to Jain et al. (2021), low-income consumers often hesitate since they lack access to the necessary infrastructure for cashless transactions and fear potential fees, slowing down the adoption process in developing countries. In addition, by investigating the actual usage of digital payments in India, Sivathanu (2019) also notes that low access to technology and education are the barriers that deter the usage of cashless payments. In the study of Xiao et al. (2023), the authors highlight that inadequate technological knowledge is a substantial barrier for consumers to adopt cashless payment.

Previous studies also assess the adoption of cashless systems around the world. Gorshkov (2022) illustrates the significant growth of digital payments in Russia. Factors leading to this growth include the country's geopolitical and security risks. This results in the centralization of the cashless economy by the Bank of Russia. However, it raises privacy and authoritarian concerns for the market participants. Hence, the government should strengthen the safety of cashless payments in the country.

Regarding the adoption of mobile payment in China, Ye et al. (2023) explain it from a sociological perspective. The first phase of the adoption focuses on the “strong ties” relationship between family and friends through the transfer of “red packages” online instead of the traditional way. The second phase is related to the migrant workers who expect a more convenient channel to send money back to their hometown. The rise in human-machine interaction characterizes the third phase.

A comprehensive study by Ng et al. (2021) classifies cashless payment solution implementations in four developing and four developed countries using a 3-D framework. The three elements under investigation are the implementation environment digitalization, payment technology solution novelty and national infrastructure status. According to Ng et al. (2021), the resistance to cash payment is attributed to the cost related to digitalized transformation in retail stores in India and Kenya or is due to the revenue auditing concerns and low discount rates from the merchants in Thailand. On the other hand, the focus on the tourism industry in Indonesia leads to the growth of cashless payments, regardless of low national infrastructure. These authors also point out that although advanced nations have highly developed infrastructure, the implementation of contactless payments is still slow due to the environment complexity, language barriers and the standard compliance of local chips (in Japan), the lack of need from customers and merchant (in Singapore) and concerns of privacy and data security (in Germany). Moreover, they show a successful case in Sweden thanks to the adoption of cashless payment since the 1950s, the support from the government to the retailers and the highly effective and networked retail banking services.

Beyond the earlier empirical classifications of Ng et al. (2021), recent developments highlight how ASEAN has sought to accelerate regional payment integration. In November 2022, five central banks – Bank Negara Malaysia, Bank of Thailand, Monetary Authority of Singapore, Bangko Sentral ng Pilipinas and Bank Indonesia – signed a Memorandum of Understanding on Regional Payment Connectivity (RPC) to promote QR code interoperability, real-time retail transfers, and cross-border acceptance of digital wallets (Monetary Authority of Singapore, 2022a). One year later, Vietnam has become the sixth member of RPC since August 2023 (The State Bank of Vietnam, 2023c). Furthermore, Vietnam also subsequently joined bilateral initiatives with Thailand and Laos in 2023, enabling consumers to conduct transactions abroad using domestic QR codes (Le, 2022, 2023; Yulius et al., 2023). These linkages mark an important step towards financial integration and consumer convenience across the region.

At the domestic level, Vietnam updated its digital payment ecosystem in line with Decision No. 1813/QD-TTg, the National Digital Transformation Plan towards 2025, with Orientation to 2030. Decree 52/2024/ND-CP is a Vietnamese regulation on non-cash payments that took effect on July 1, 2024, replacing Decree 101/2012/ND-CP and aiming to transform the cashless payment landscape by providing clearer rules for e-money, payment accounts and intermediary payment services, while also enhancing security and promoting digital transformation. It creates a more detailed and favourable legal framework for businesses and individuals, addressing new technologies and ensuring legal clarity in line with broader government goals for the Fourth Industrial Revolution.

These developments indicate that Vietnam's trajectory is not only shaped by internal reforms but also embedded in ASEAN'sbroader vision for interoperable payment systems. Integrating such recent policy and market updates provides a more comprehensive basis for analyzing Vietnam's readiness to scale cashless payment solutions relative to its ASEAN peers.

There are three main directions of studies on cashless payment in Vietnam. One identifies the factors that impact the intention of cashless payment, others analyze the relationship between the cashless economy and economic growth, and the last stream is to investigate the niche contexts. The first research direction is identifying the factors impacting the intention to make cashless payments in Vietnam. Dinh et al. (2018) state that perceived usefulness, convenience, promotional offers and social approval motivate mobile payment transactions. Meanwhile, lack of trust, limited opportunities for usage, complexity and habits associated with cash payment limit the adoption of this payment method. Similarly, Phan et al. (2020) conclude the positive impact of determinants of expected efficiency (the extent of the benefits gained from the use of technology), expected effort (the ease of using), social impact, safety and security and supplier reputation on the adoption of mobile payment services. In the same stream of research, Wang et al. (2023) find that the perceived value of cashless payment and its use intention are positively related, given the mediating role of psychological safety. Additionally, trust propensity has a positive moderating effect on the relationship between perceived value and psychological safety.

Regarding the relationship between a cashless economy and economic growth, Tran and Wang (2023) and Khuyen (2024) confirm that cashless payment system significantly stimulates economic growth. Cashless payments also boost economic growth by addressing tax evasion. According to Tran and Wang (2023), the authors suggest that with this payment method, it can help mitigate tax evasion by increasing transparency. As a result, it can positively impact Vietnam's economy.

Regarding niche context, Luan et al. (2023) deeply analyze the access to credit and cashless payments for community-based tourism household-owned businesses in mountainous Northwestern Vietnam. They confirm that these payment methods improve the income of the target respondents. Moreover, the education of the business owners and the collateral assets affect access to these services. Hence, the government should have initiatives and policies to support credit and cashless payments for these businesses in mountainous rural areas.

The literature shows a research gap in this topic. Although the benefits of a cashless economy are undeniable and the factors that impact the use of cashless payment in Vietnam are defined, there is a lack of research that compares the adoption of non-cash payment in Vietnam and other ASEAN countries. Moreover, the short analysis of the sustainable adoption of Vietnam in cashless payment solution implementations hinders the necessary actions of policymakers and financial service providers from focusing on the key factors to maximize the potential. This paper will fill these gaps.

We implement a three-pillar framework for country-level cashless payment solution implementation, following Ng et al. (2021). The three dimensions are technology implementation environment digitalization, technology solution novelty and national infrastructure status for a country's overall development.

There are several reasons for choosing this framework. First, it provides a multidimensional and holistic lens to assess readiness and sustainability in adopting cashless payment systems, especially within developing economies such as Vietnam. Unlike individual-level technology adoption models such as the Technology Acceptance Model (TAM) or the Unified Theory of Acceptance and Use of Technology (UTAUT), which emphasize personal behavioural intention, the three-pillar framework allows for macro-level analysis. It aligns with the study's objectives to (1) compare Vietnam with other ASEAN countries and (2) assess Vietnam's systemic readiness for a cashless transition.

Second, the framework is uniquely positioned to capture the intersection of technology, infrastructure and socio-economic environment. These factors are identified in the literature as critical to the successful implementation of non-cash payment systems. It has also been empirically validated across both developing and developed countries, making it an ideal tool for cross-country comparisons.

The implementation environment digitalization characterizes local businesses' readiness to support digital transaction implementation. It includes the nature and physical and technical setting of vendors, merchants and consumers, together with the training and educational level of the users to employ the advanced payment technology. Payment technology solution novelty is defined as the degree of newness and complexity of technology solutions. Ng et al. (2021) classify technology solutions novelty into the lower solutions, which include the lower technology, such as the traditional debit and credit cards and the higher solutions, which involve more advanced technology, such as near-field communication (NFC), one-time passwords (OTPs), QR, mobile payment applications and contactless chips to store card information. It is claimed that there is no standard definition for national infrastructure. Ng et al. (2021) use the average measurements of information and communication technology (ICT), transport and utility infrastructure and information adoption from the World Economic Forum Global Competitiveness Report 2019 as a proxy for national infrastructure status. They also claim the significance of telecom and energy in the digital payment system.

Drawing directly on Ng et al. (2021), Table 1 specifies explicit criteria for distinguishing between “high” and “low” in each dimension, providing greater clarity in applying the three-pillar framework.

The three dimensions are classified into a “high” or “low” level as shown in Figure 1, based on a subjective basis, corresponding with the above definitions. To assess the level of these elements, we searched business, academic and government press, research and policy articles. Then, the appropriate knowledge is extracted. Field observations and informal interviews were also conducted in Vietnam's traditional markets and retail stores to capture context-specific insights, notably where formal data were lacking. This approach was deemed suitable for a national-level assessment where diverse indicators and stakeholder perspectives must be synthesized.

Driven by factors such as government initiatives, technology developments and shifting consumer preferences, the adoption of cashless payment in the ASEAN region has grown steadily recently. The typical early adoption phase of cashless payments in ASEAN started with the adoption of ATM, debit and credit cards (Hinayon, 2020; Lu, 2022; Suidarma, 2019). During the transition phase, most countries advanced to establishing Electronic Payment Networks (Bradford et al., 2009; Peev and Gugler, 2023). In the acceleration phase, the government's efforts have encouraged the significant expansion of mobile banking, e-wallets, the digital payment ecosystem and QR code payments in ASEAN (Kamis et al., 2023; Zhi Wei and Khaw Peng Tsu, 2018). Even though the progress is similar, the evolution and adoption level of non-cash payment varies among ASEAN member countries. This paper compares the evolution of cashless payment adoption through three phases, bank cards, National Electronic Payment Networks and digital payments, across some key ASEAN countries, including Singapore, Malaysia, Thailand, Indonesia, the Philippines and Vietnam.

The initial adoption phase started in the early 1960s in ASEAN. According to Hinayon (2020), Singapore, Malaysia and Thailand pioneered credit and debit cards, while the Philippines, Indonesia, Vietnam and Cambodia were imitators. Among ASEAN countries, bank cards were issued as early as Malaysia. Standard Chartered Bank introduced the first credit cards in 1968, marking the beginning of issuance in this country and ASEAN. One year later, Bank of America introduced the credit card in the Philippines. Later, thanks to the expansion of MasterCard's presence in Thailand and Singapore, international credit cards were issued in the early 1970s. The beginning of credit card issuance in Indonesia was marked by the release of the first credit card by Bank Central Asia (BCA) in 1981.

The evolution of cashless payment in Vietnam is later than that of other countries in ASEAN. The State Bank of Vietnam issued Decision No. 22/QĐ-NH1, the first instructions for cashless transactions, in February 1994 (Rules for Cashless Transactions, 1994). It intends to improve consumer protection, maintain financial stability and stimulate the development of a secure and dependable payment environment in the country. In 1996, the first bank card, the international MasterCard, was released in Vietnam (Minh Loan-Duy Cong, 2017). However, more than five years later, in 2002, Vietcombank issued the first domestic debit card. Since then, automated teller machine (ATM) cards have marked the initial steps towards cashless transactions in Vietnam. Banks started providing ATM cards, allowing customers to withdraw cash and perform basic banking transactions electronically.

After 20 years, the total number of bank cards used by the Vietnamese has significantly increased. According to the State Bank of Vietnam, the number of domestic cards in circulation by the end of September 2023 is 102.15 million, rising 16% from 87.78 million cards in 2020. The number of international cards increased 2.5 times from 15.35 million in 2020 to 38.54 million by September 2023, as shown in Figure 2.

Although bank cards were issued and launched in Vietnam decades later than in other countries in the region, the card usage rate in Vietnam is increasing steadily. These cards are the preferred payment method for Vietnamese consumers (Visa, 2023). In the Consumer Payment Attitudes Study of Visa (2023), the usage of cards by Vietnamese customers for online shopping, contactless transactions and card swipe/insert is 66%, 57% and 48%, respectively. Vietnam's card usage rate ranks third after Singapore and Malaysia. According to the State Bank of Vietnam data, as of September 2023, the total number of transactions by bank card is 201,221,846 items, an increase of 62% compared to the same period in 2020, rising 134% compared to data in March 2020. As of quarter three, 2023, the value of bank card transactions is VND 418.5tn, double the total data value in quarter one, 2020, as shown in Figure 3.

The transition phase of the cashless revolution in ASEAN started in the early 90s with the introduction of multiple National Electronic Payment Networks. Singapore is the first country to launch its Electronic Payment Networks in ASEAN. The Network for Electronic Transfers (NETS) was founded in 1986 by DBS Bank, OCBC Bank and United Overseas Bank (UOB) to establish the adoption of electronic payments. To secure high-value transactions between banks, the Bank of Thailand implemented the BAHTNET (Bank of Thailand Automated High-value Transfer Network) in 1995 (Bank of Thailand, 2023). It was the first payment system infrastructure that expanded user options to transfer money via digital channels in Thailand. Meanwhile, the Malaysia Electronic Payment (MEPS), established in 1997, was Malaysia's first National Electronic Payment Network. MEPS has improved Malaysia's payment infrastructure, allowing secure, efficient and convenient electronic cashless transactions. Two years later, in 1999, Bank Negara Malaysia (the Central Bank of Malaysia) implemented the Real Time Electronics Transfer of Funds and Securities (RENTAS), which aimed to improve the efficiency of the interbank extensive value payment system.

Like the initial adoption phase, Indonesia, Vietnam and the Philippines were the followers. These countries launched their National Electronic Payment Network approximately ten years later than Singapore, Thailand and Malaysia. The first National Electronic Payment Network in Indonesia is BI-RTGS (Bank Indonesia Real Time Gross Settlement), launched in 2000. This platform operates under the management of Bank Indonesia (the Central Bank of Indonesia). At first, BI-RTGS was used to transfer large-value interbank transactions in real time. For low-value cashless payments, Indonesians use the Sistem Kliring National Bank Indonesia (SKBNI), the national clearing system of Bank Indonesia (Titiheruw and Atje, 2009). In 2002, the Bangko Sentral ng Pilipinas (the Central Bank of the Philippines) launched phase one of PhilPaSS (Philippine Payment and Settlement System). At first, PhilPass covered only lending and borrowing transactions between banks. However, in December 2002, PhilPass implemented the DDA-RTGS unit to handle real-time payments and enhance liquidity management for banks and businesses (Bangko Sentral Ng Pilipinas, 2019).

The State Bank of Vietnam launched the National Payment Corporation of Vietnam (NAPAS) in early 2004, much later than other ASEAN countries. Currently, the principal shareholders of NAPAS are the State Bank of Vietnam and commercial banks. NAPAS provides a unified infrastructure for electronic payments in Vietnam. The networks connect multiple banks and financial institutions within Vietnam. After years, under the direction of the Vietnamese government and the SBV, NAPAS has applied the policy to reduce all its service fees, including ATM withdrawals, the 24/7 quick interbank funds transfer and costs for internal transfer and non-financial transactions, since October 2019 (The State Bank of Vietnam, 2019).

The rapid diffusion of government initiatives, e-commerce, Generation Z influence and the development of Fintech in ASEAN have led to the acceleration of the cashless payment revolution. After the introduction of the National Electronic Payment Network, the governments of ASEAN countries promoted digital payment systems, such as Internet banking, mobile banking services, e-wallets and Fintech solutions. For instance, Malaysia develops e-wallets such as GrabPay, Touch’ n Go eWallet and Boost. Meanwhile, Thailand launched the National e-Payment Master Plan, including the PromptPay service, in 2016 to encourage a cashless society. After the implementation of NETS, Singapore introduced a variety of digital wallets, including DBS PayLah!, OCBC Pay Anyone and UOB Mighty. In order to encourage the adoption of non-cash payments, the Indonesian government initiated the National Payment Gateway (Gerbang Pembayaran Nasional, GPN) in 2017. It launched the Gerakan Nasional Non-Tunai (GNNT). In addition, the major banks in Indonesia also launched mobile banking apps, online payment gateways, such as DOKU, Midtrans and Veritrans or e-wallets like GoPay (part of the Gojek ecosystem), OVO, Dana and LinkAja, which provide accessibility and convenience for users.

In addition, due to the lockdown period during the COVID-19 pandemic, the development of online shopping also accelerated the adoption of cashless payments to avoid physical contact. According to the report “Visa Consumer Payment Attitude Study (2021), the pandemic has led to more than half of Southeast Asian consumers (54%) choosing digital payments.” In 2021, more than two-fifth of Southeast Asian consumers (46%) carried less cash in their wallets than before the pandemic, particularly those in Indonesia (60%), Vietnam (56%) and the Philippines (53%). Figure 4 illustrates that after one year, from 2021 to 2022, ASEAN consumers tend to carry less cash in their wallets. Cambodia is the only exception. After the COVID-19 pandemic, Cambodian consumers returned to using cash payments.

Vietnamese people prefer using e-wallets, 89%, whereas Singaporeans like using credit and debit cards, 97% (Visa, 2023). Additionally, several studies emphasize that Generation Z in ASEAN countries, particularly Malaysia and Indonesia, is fostering the acceptance of the cashless payments method (Imani and Anggono, 2020; Rahadi et al., 2022; Sitompul et al., 2022). Vietnam's cashless payment landscape has been evolving rapidly, and a young population with high smartphone penetration supports it (Ly et al., 2022; Tran and Wang, 2023). The VNPAY, OnePay, developed online payment gateways, allowing customers to make payments for goods and services online. Later, e-wallets like MoMo, ZaloPay and ViettelPay became increasingly popular, offering various services, including bill payments, money transfers and online shopping. The government has also taken steps to promote digital payments, including the implementation of QR code-based payment systems. Regarding non-cash payment activities, by the end of September 2023, Vietnam had 50 non-bank institutions licensed to provide intermediary payment services, increasing from 32 organizations in 2019 (The State Bank of Vietnam, 2023b). However, the ratio of non-cash payment transactions to total retail sales is still low, and the development of non-cash payment activities is limited. According to Reuters, the government's strong incentives, investments in Fintech from commercial banks and the broad use of QR codes all contribute to the continued growth of digital payment in Vietnam.

Figure 5 shows that credit cards are the most common cashless payment instrument, with 92.9%. The usage of e-money cards in Thailand and Malaysia is the highest, with 63.71 and 61.96%, respectively. Debit cards are the most common instrument in Indonesia, accounting for 43.13%. Cheque is the least popular payment method in Thailand, Indonesia, Singapore, Vietnam and Malaysia, at less than 2%. While cashless payment adoption is progressing across the ASEAN region, the level of adoption varies depending on factors such as infrastructure, government initiatives, regulatory environment and consumer behaviour. However, the trend towards a cashless society will continue as technology advances and consumer preferences shift towards digital payments.

The first dimension to analyze is the implementation of digitalization. According to theVisa Report (2023), eating and dining, convenience stores, supermarkets and retail shopping are the most common activities in which ASEAN customers make payments cashlessly through quick-response (QR) codes and mobile applications. Therefore, we will focus on the environmental digitalization of these businesses in Vietnam.

According to theNielsen Database (2016), Vietnam has approximately 1.4 million local convenience stores and 9,000 traditional markets, contributing 75% of the revenues in Vietnam's traditional retail market. In addition, despite the growth in online shopping channels with the expansion of big players like Shopee, Lazada and TikTok shops, the traditional retail markets still account for 85% of the demand. Customers still prefer cash in these traditional shopping places in Vietnam. According to the Vietnam Provincial Competitiveness Index (PCI) 2022 report (Malesky et al., 2022), adopting electronic invoices in micro and small-scale businesses faces challenges because not all firms can rapidly meet the information technology and telecommunications requirements due to limited investment capacity. Moreover, many small-scale retail businesses, which have evolved from household enterprises, are used to the clear and straightforward invoice management processes with traditional paper invoices. These businesses also encounter obstacles related to computer proficiency and the use of invoice management and tax declaration software. Besides, from the observation and interviews with vendors, we find other reasons behind the resistance to cash payments in these businesses. First, the transaction values at these places are small, which can be as low as a dollar or less, leading to low demand for digital payment. The second reason is a habit consistent with the result of Dinh et al. (2018). Many buyers are middle-aged women familiar with cash transactions and hesitate to adopt digital solutions. A substantial part of this group are housewives without bank accounts or having no habit of carrying a purse around. They usually travel by motorbike and keep only cash in their back pockets. Third, some vendors raise their concerns about security in digital transactions (Dinh et al., 2018; Phan et al., 2020; Wang et al., 2023). They are concerned about being duped by clients or stealing their bank accounts stolen because their account numbers have been made public. Fourth, vendors explain that they are slow to switch to cashless transactions due to tax purposes. Most local retail businesses are small family businesses and do not register with the local government; hence, they are concerned about tracking revenues from tax authorities. This reason is similar to the concern of merchants in Thailand, as stated by Ng et al. (2021).

The ageing population also challenges the implementation of cashless payments because older people are unfamiliar with technology. The statistics from the Government Statistics Office of Vietnam (GSO) (2023) point out the rapid rise in the population age group of 60 and above, from 11.9% in 2019 to 13.9% in 2023. In an interview with Techcombank, Professor Doctor Ta Van Tram explains that infrastructure development and training for vendors require more investment to promote digital payments to older adults. Older people find it challenging to use cards or mobile payment applications. Most senior citizens in Vietnam use mobile phones only for calls, so they are unfamiliar with the advanced functions of smartphone applications. The complexity of access to cashless payment systems restricts the users' willingness to shift from cash transactions (Dinh et al., 2018; Phan et al., 2020). As a result, non-cash payment systems should be kept simple and carefully guided towards the seniors.

Cash payment is less prevalent in mountainous and rural regions, as stated by Mr Pham Anh Tuan, Director of the State Bank's Payment Department. The inadequate infrastructure impedes the growth of a cashless payment system in rural and mountainous areas. A report from Dien Bien Online, a mountainous province which borders China and Laos, shows that in 2023, 8% of the households have no access to electricity, 30.35% of the families are classified as poverty households, only 70% of the residents own smartphones, and some areas in the province have no access to 3G and above and Internet services (Van Tam, 2023). Statistics in Web Portal – Digital transformation of Vinh Phuc Province in 2023, another suburban city in the North, states that more than 80% of residents in the province make their electricity and water bills through bank transfers. However, most transactions are made in the city, whereas the use rate of this payment method is low in mountainous and rural regions, especially among ethnic minority communities. Moreover, although Luan et al. (2023) find that education influences access to the non-cash system, a Vietnam SDGCW survey from 2020 to 2021 by UNICEF and General Statistics Office (2021) presents a low rate of less than 50% of the population completing high school in the mountainous regions in North and Central Vietnam and the rural provinces in the Southwestern region. Therefore, the government and financial service providers must put a lot of effort into encouraging the use of cashless payments equally throughout the country in urban and rural areas.

Realizing these gaps, the Vietnamese government, the State Bank of Vietnam (SBV) and commercial banks have taken initiatives to increase the awareness of cashless payments in traditional markets, retail stores and rural areas. Collaboration with local governments and commercial banks resulted in nationwide promotion campaigns in conventional markets, restaurants, coffee shops and supermarkets to increase awareness and social impact. It is believed that perceived usefulness, promotional offers and social effects play a crucial role in stimulating the use of non-cash payment systems (Dinh et al., 2018; Phan et al., 2020; Wang et al., 2023). The most common mode of payment in the markets is using a QR code. The vendors are assisted in opening a bank account if needed at no cost and in creating a QR code and placing it in their store for the convenience of payment (Phuong Dung, 2023). They are also encouraged to install POS terminals at a low cost. The terms “mô hình chợ 4.0” (market 4.0) and “tạp hóa 4.0” (convenience store 4.0) are becoming more familiar to the population.

Besides, the government has promoted adopting a cashless payment system in hospitals and schools. The record from the SBV in 2023 presents that 88% of the state-owned hospitals and 60% of the local healthcare centres accept cashless transactions for medical bills. Regarding schools, Ho Chi Minh City had official documents to guide the use of the cashless system for school fees for all schools in the city. Remarkably, payments should be made via mobile applications instead of cards and managed by a system called SSC. However, the parents are still concerned about the transaction fees, the consistency of mobile apps and the transparency of the transactions. Lastly, the government has worked with financial service providers to promote cashless payment systems in rural areas. Specifically, Agribank, the most popular commercial bank in the mountainous and rural regions, has built different digital products to support the population in these areas in accessing a digital payment system. According to the General Statistics Office of Vietnam (GSO) (2023), 61.9% of the Vietnamese live in rural areas. Hence, they contribute significantly to the country's success in digital transformation.

The second pillar is the degree of newness and complexity of technology solutions. Vietnam adopts technology quickly in finance, such as the development of blockchain technology in banking and finance, the increasing popularity of digital payment methods facilitated by smartphones and the rapid growth in numbers and services of Fintech firms. This session will focus on developing banking card services, blockchain solutions and digital payment technology in Vietnam.

A joint documentation produced by Google, Temasek, and Bain & Company (2019) highlights that in 2018, only 21% of the Vietnamese were banked, meaning they own credit cards, insurance and investment products. This rate is similar to that of Indonesia and the Philippines, but it is only a third of the rate in Singapore. However, 69% of the Vietnamese population was unbanked, meaning they had no access to financial services, including bank accounts. This percentage is the highest amount in ASEAN. Another 10% is underbanked, implying that they do not have any access to credit cards, are underinsured and have no long-term savings products. The reasons behind the low rate of credit cards owned by the Vietnamese population are similar to the reasons Ye et al. (2023) demonstrate in China. First, it is due to the culture of credit diffusion, particularly in the older generation. Vietnamese people prefer to spend what they earn and pay off their properties in cash. Nhan and Duong (2023) compare the percentage of customers who use instalments for car purchasing in Vietnam, the USA and Germany. The numbers are 44%, 80.9% and 85.3%, respectively. The value of affordable and popular Japanese and Korean brands is below this rate. Second, the regulatory policies hinder the motivation to own a credit card. Commercial banks have strict regulations related to income and collateral assets. A large number of Vietnamese people work in informal businesses; consequently, they have no historical records of earnings and property ownership. Lastly, Vietnamese people are also concerned about the multiple fees and high cost of credit cards.

Despite the higher rate of unbanking in Vietnam compared to other countries in the region, the number of international payment cards in Vietnam has increased, as shown in Figure 2 earlier. As mentioned above, the number of international payment cards doubled from 15.35 million in early 2020 to 38.54 million at the end of 2023. However, the number of domestic payment cards has been on a downward trend since 2023. Moreover, Mr. Pham Anh Tuan shares that by the end of 2022, 77.41% of the Vietnamese population above 15 years old own bank accounts. Therefore, although the rate of credit cards owned in the country is low, most Vietnamese own debit cards.

Despite the higher rate of unbanking in Vietnam compared to other countries in the region, the number of international payment cards in Vietnam has increased, as shown earlier. However, the number of domestic payment cards has been on a downward trend since 2023. Moreover, Mr. Pham Anh Tuan shares that by the end of 2022, 77.41% of the Vietnamese population above 15 years old own bank accounts. Therefore, although the rate of credit cards owned in the country is low, most Vietnamese own debit cards.

Regarding Vietnamese ATM cards, in 2016, the SBV granted a license to the first and unique intermediary payment service provider, NAPAS, to coordinate with commercial banks, payment intermediaries and partners to provide payment services through cards and bank accounts, contributing to the diversification of the cashless payment system in Vietnam. NAPAS cards comply with the basic standards of chip cards for domestic payment in Vietnam issued by the SBV. Their modern chip card technology helps prevent fraudulent transactions. This instrument is popular in other ASEAN nations, as indicated earlier. It is also similar to the National Payment Card System in Russia regarding government monitoring of domestic transactions with cards (Gorshkov, 2022), but with a less aggressive implementation.

Vietnam has also promoted the adoption of contactless chip cards. The domestic contactless chip was released in May 2019. This technology is believed to provide users with more safety, privacy protection and more convenient functions. The SBV targeted 21 million accounts to be converted from magnetic chip cards to contactless chip cards by the end of 2019, and this number would be all 76 million cards issued by the end of 2021. However, this target could not be achieved for several reasons, including the lockdown during the COVID-19 pandemic. To achieve the target of switching to contactless chip cards, all banks must stop issuing magnetic chip cards as of March 31, 2021. The current magnetic chip card owners are encouraged to swap to advanced technology cards at low costs and even free of charge in some banks.

The process of opening bank accounts is facilitated by adopting the Electronic Know-Your-Customer (eKYC) solution. The identity verification procedure can be done electronically; therefore, the physical documentation can be minimized. The eKYC process not only identifies and prevents financial crime but also meets changing customer expectations. Consequently, it also optimizes banking activities. According to Mr Pham Anh Tuan, this solution will promote the cashless payment system in rural areas. In Vietnam, the banking sector has pushed the adoption of eKYC since March 2021. The SBV also releases official documents to guide commercial banks. Until January 2024, thanks to this solution, almost 27 million accounts were opened. However, these accounts limit the amount of cash withdrawals and charge high transaction fees.

Besides card payments, Vietnam and other ASEAN countries have experienced a significant move towards digital payments in response to the widespread smartphone use and emerging e-commerce market. The number of smartphone users in this region increased from 498 million in 2017 to more than 675 million in 2022, accounting for 82% of the population. In most ASEAN nations, smartphone penetration and engagement are even higher than in banking (Yulius et al., 2023). According to a report by Google, Temasek, and Bain & Company (2019) and by Hoppe et al. (2023), in ASEAN, among the five critical financial services, including lending, investment, insurance, remittance and payments, payments are the most advanced with the highest digital penetration rates.

In Vietnam, digital payments via digital wallets and mobile payment applications or e-wallets are becoming popular. Figure 6 illustrates the significant growth of digital payment transactions in Vietnam, both in the number of transactions and in the transaction values, after the break of the COVID-19 pandemic in big cities in Vietnam in 2021. Although more transactions are made through mobile banking, the value of transactions through the internet is much higher. Stated another way, it indicates that users prefer mobile banking for small-value transactions and the internet for higher-value transactions. Most commercial banks provide secure online banking services to enable users to go both cashless and cardless. Furthermore, Mobile Money services are promoted to expand the use of cashless payment services to most people, especially those in remote, mountainous and rural areas. Notably, NAPAS, Viettel Digital and the Vietnam Posts and Telecommunications Group (VNPT) launched a pilot Mobile Money service at the beginning of 2022 to target the unbanked population. After two years of launching, 70% of the users are in remote and rural areas.

In addition, e-wallets are also quickly gaining popularity. By the end of 2023, 51 non-bank payment service providers will be legally operating in Vietnam. Digital payment startups also lead in terms of the number of companies and the funding amounts among Fintech firms (Yulius et al., 2023). In Vietnam, Momo and VNPay are the top Fintech e-wallet players funded with US$100m and US$300m, respectively. These e-wallets often form partnerships with numerous retailers and businesses and offer promotions to reach more users.

A popular feature of the digital payment system is QR code technology. As mentioned above, merchants and consumers in the traditional convenience stores and markets in Vietnam prefer this payment tool because of its ease and convenience. Cost-effectiveness is also an essential trait of the QR system, as it does not require using POS terminals and other hardware. Moreover, QR codes make transactions more secure because every barcode transaction is encrypted with enhanced algorithms. This tool also allows retail payments to be made in real-time. The SBV records that 183 million transactions were made via QR codes in 2023, increasing 172% in one year, and the value of these transactions rose by 74% compared to 2022.

Cross-border payment systems through the use of QR codes are encouraged in ASEAN. Although each country has its payment preferences, collaboration between payment providers, financial institutions and e-commerce platforms is necessary to sustain the digital transformation in Southeast Asia. Subsequently, Malaysia, Singapore, Thailand, Indonesia and the Philippines signed a memorandum on regional payment connectivity in November 2022 (Monetary Authority of Singapore, 2022a). Vietnam also established a bilateral agreement to launch a cross-border QR code payment with Thailand and Laos (Yulius et al., 2023). Efforts to develop cross-border QR code payment linkages will create a more integrated payment landscape, benefiting merchants, customers and ASEAN tourists.

The last dimension is national infrastructure. Infrastructure facilitates non-cash transactions (Bolibok and Żukowski, 2015). Following Ng et al. (2021), this paper assesses national ICT, telecom and energy infrastructure. The ICT infrastructure facilitates the development of innovative payment solutions that can support immediate online money transfers. Energy infrastructure supports cashless payment mechanisms by providing households with affordable and sustainable energy access (Pailman et al., 2015).

Although infrastructure development in Vietnam is considered crucial for economic growth (Giang and Pheng, 2015), a report by British Chamber of Commerce Vietnam (2021) points out that Vietnam has a relatively low level of fixed broadband adoption due to a limited number of fixed-line connections and the strong influence of mobile platforms. Internet speeds are also slow. Connectivity is often interrupted because of the high density of submarine cable breaks. Realizing the significance of ICT in the nation's digital transformation plan, the Vietnamese government supports the investment from telecommunications service firms, which are expected to invest US$2.5bn to deploy and commercialize 5G technology from 2020 to 2025, according to Mr. Nguyen Ba Hung, a principal country economist from the Asian Development Bank (ADB) in Vietnam, in an interview in 2023.

In addition, Vietnam's current energy infrastructure is insufficient, characterized by a weak grid capacity that hinders the integration of new energy sources, especially from renewable projects, as reported by Tran and Tran (2024) in a publication from the International Trade Administration. The country's rapid industrialization has substantially increased energy demand, particularly for electricity. Vietnamese government anticipates electricity consumption to grow by 10–12% annually until 2030, marking one of the fastest growth rates in Asia. This power deficit was witnessed in 2023, with the northern region of Vietnam facing severe shortages. The Ministry of Industry and Trade (MOIT) forecasts that Ho Chi Minh City's manufacturing hub will lack over 10,000 megawatts (MW) or 7.5% of its total capacity by 2030. At the same time, reserves in existing oil and gas fields are rapidly depleted.

Vietnamese government retains control over electricity transmission grids to safeguard national energy security. The Power Development Plan VIII (PDP8), approved in 2023, serves as the framework guiding industry stakeholders forward, with a substantial focus on introducing renewable energy into the market. PDP8 emphasizes the expansion of large-scale solar and wind power sources. The Vietnamese government has introduced several policies to promote the growth of the wind energy sector. Vietnam has also experienced rapid expansion in solar energy installations in recent years, leading the Southeast Asian solar power market by 2023, according to SolarPower Europe (SPE) ‘s forecast. However, as noted earlier, the investment in these projects remains challenging due to the negotiation with the authorized parties and the lack of capital.

Based on the above analysis, Vietnam is considered a country with a low level of local implementation environment digitalization and a low level of national infrastructure, but a high level of payment technology novelty. The unpopularity of non-cash transactions in traditional markets and mountainous and rural areas, particularly among adults and senior citizens, contributes to the barriers to digitalization in Vietnam. Ng et al. (2021) show a similar culture in hawker centres in Singapore, where more than 90% of transaction values are made in cash. Both vendors and consumers have the habit of making purchases in cash despite government efforts to promote a cashless culture in these businesses. Regarding infrastructure, like other developing nations in the study of Ng et al. (2021), Vietnam experiences insufficient national infrastructure to achieve a cashless society. Despite the low level of the digital environment and national infrastructure, Vietnam is developing high-tech innovations such as debit and credit cards, NAPAS, contactless chip cards, eKYC and digital payment platforms. This success results from the consumer needs of young generations and urban citizens, as well as the growth of e-commerce. Therefore, to achieve the objective of a cashless society, Vietnam needs to overcome the barriers to the digitalization environment and national infrastructure.

A persistent habit of adopting cashless transactions is the first barrier to implementing a cashless payment system in Vietnam. It is also the most significant barrier to construction digitalization in Vietnam, as noted byVăn Tâm (2023). However, changing the habit is challenging. Particularly, this enduring resistance is not only behavioural but also fundamentally embedded in cultural standards and generational perspectives. In Vietnam, older generations typically emphasize tangible, cash transactions to uphold financial authority and trust. This resistance illustrates the “primacy of structures” theory (Ho and Vuong, 2025)in which individual decisions are influenced by enduring social and historical contexts. On a deeper level, it might indicate a type of “existential perversion” which a deliberate refusal of enforced digital systems to maintain self-identity and autonomy.

Digital Acculturation Theory provides a framework to grasp this transformation as it implies that people progressively alter their actions not merely through compulsion, but as they assimilate digital technologies into their cultural and social context (Dey et al., 2020). This emphasizes the necessity of integrating digital payment solutions into local customs, generational beliefs and established social norms. For example, Ye et al. (2023) demonstrated how the digitalization of cultural traditions and social connections, such as robust family relationships and the exchange of “red envelopes”, in China impacted the adoption of mobile payment systems. Moreover, the Granular Interaction Thinking (GIT) model (Vuong and Nguyen, 2024) recasts adoption as a probabilistic result instead of a binary one. The probability that people adopt cashless payments arises from the intricate interplay of factors such as cultural endorsement, social pressure, perceived safety, ease of use, generational views and infrastructure dependability. Consequently, the aim is to create a steady stream of informational and emotional “nudges” that strengthen acceptance gradually. To address this, a strategy for behavioural change, including leveraging social influence, enhancing user experience and focusing on nationwide education and awareness campaigns, is necessary.

First, social influence has an impact on technology adoption. Individuals tend to use digital payment methods as they observe their peers and trusted community members engage with those methods (Sihombing et al., 2024). Therefore, policymakers and financial providers should target the influencers in the community, making them ambassadors for the cashless campaigns. Their testimonials highlight the benefits of digital payment systems, which can encourage individuals to overcome their habit of cash reliance (Klimontowicz and Harasim, 2022). In this context, strategies ought to focus on cultural trust networks, including community leaders, religious figures or family influencers, akin to how digitalization of “red envelope” traditions in China facilitated the normalization of mobile payments within close family groups by Ye et al. (2023). In Vietnam, simultaneous initiatives might involve digitizing culturally important traditions such as Tet gifting to encourage behavioural shifts through well-known rituals. Furthermore, similar to China's second phase of adoption, rural–urban migration in Vietnam presents a distinctive opportunity. Rural families reliant on migrants could gain from mobile remittance solutions. Creating services that resonate with the culture of these users may be a crucial approach to overcoming resistance to change.

Besides, improving user experiences with more accessible digital payment interfaces may alter the habitual resistance to non-cash payments. Users are more willing to adopt cashless payment when they are aware of the benefits of speed, convenience and cost savings (Ayuningtyas et al., 2024). As a result, technological advancements implemented by financial service providers should keep the digital payment process simple, efficient and secure (Ayu Putri Suprapti et al., 2024). They should also enhance accessibility with user-friendly features on their applications. The Technology Acceptance Model (TAM) reinforces this by connecting adoption directly to perceived usefulness and ease of use. Likewise, the Unified Theory of Acceptance and Use of Technology (UTAUT2) model emphasizes facilitating conditions and performance expectancy, suggesting that funding for app accessibility and POS systems directly influences behavioural intent.

In addition to these measures, incentives in the form of financial rewards, discounts and loyalty programs tied to digital payment methods can be a significant tangible motivation to encourage the adoption of cashless transactions (Klimontowicz and Harasim, 2022). For example, tax incentives could be awarded to small retailers and household businesses for cashless transactions. Besides, retailers should be supported financially for the installation of POS systems. Clear guidance to vendors on how to use those systems can encourage merchants to shift away from cash transactions.

Further, customers are more confident using e-payment services when they are more digitally proficient (Pham, 2020). It can be explained that those with high levels of digital knowledge tend to protect personal information more effectively in cyberspace (Dienlin and Trepte, 2015). Consequently, there is a need to enhance digital literacy, which refers to proficiency in using digital platforms and applications (Prete, 2022), for users. In contrast, Internet users who are aware of the risk of how online and offline marketers can exploit their personal information tend to refuse to use e-payment (Dawson, 2006). Therefore, financial service providers and consumers should put more effort into enhancing digital literacy. Training programs that target less digitally literate groups and continuous support to SMEs are necessary to strengthen their digital literacy skills and online security behaviours. As a result, they are more confident in adopting digital payment systems (Utama et al., 2023).

Privacy is another concern that hinders the adoption of cashless payment in Vietnam. As users must provide personal information to financial service providers in order to use the services and transaction history is recorded, there is a concern about information leak and misuse. Users in Russia (Gorshkov, 2022) and China (Tao et al., 2024) also raise this concern. The Digital Acculturation Theory (Dey et al., 2020) offers a valuable framework for comprehending how privacy norms are socially negotiated during the process of adopting technology. As people become more integrated into digital environments, their privacy expectations change in response to their exposure to digital services. In the context of cashless adoption, digital acculturation indicates that when individuals engage more often with online banking, e-commerce and digital wallets, their understanding and trust might increase, but this only occurs if these experiences are viewed as safe, clear and in harmony with their cultural values and traditions.

In the same line of argument, privacy issues are closely associated with trust and perceived risk, which are key elements in UTAUT2 and TAM frameworks. In the realm of mobile and digital payments, the perceived threat to privacy and security is a statistically important obstacle that diminishes the intention to engage with digital payment systems (Mondego et al., 2023). To address this concern, Sakib et al. (2024) emphasize through UTAUT2 that performance expectancy and facilitating conditions, such as transparent privacy policies and user-friendly data controls, directly affect consumers' confidence in the expertise and integrity of financial service providers, particularly in developing nations. This influences their readiness to adopt digital financial services. The finding emphasizes the necessity for the authority to provide clear guidelines for users to be aware of the threats and strengthen their resistance against them. At the state level, standardized frameworks and strict regulations from the government can protect citizens’ private information from cyber threats (Krivokuća et al., 2024). Penalties imposed for breaking the regulations should be communicated effectively to individuals and organizations to enforce compliance and mitigate illegal actions. Besides, service providers and digital service operators are also required to enhance their regulatory obligations. Findings from Monir et al. (2025) validate that transparency, clear data usage policies and high customer service quality are essential for minimizing privacy concerns and promoting cashless adoption. Nevertheless, the fast-spaced growth of technology requires the frequent evaluation and review of these policies to adapt to the new challenges (Usmiati et al., 2024).

Additionally, adopting Artificial Intelligence (AI) can foster security in digital payment transactions (Nanda et al., 2024). Studies show the role of AI-driven tools in fraud detection and risk assessment (Kadkhoda and Amiri, 2024; Letkovský et al., 2024; Sun et al., 2024) and other advanced technologies such as encryption, biometrics and tokenization in protection against data breaches, unauthorized access and cyberattacks (Sharma et al., 2024). As the technologies that cause cyberthreats evolve over time, so do technologies that improve cybersecurity.

Following the probabilistic framework proposed by Ho and Vuong (2025) digital adoption may be seen as a result of the interplay between institutional stability, infrastructure and individual digital skills, within a dynamic probability environment. Enhancing infrastructure not only boosts Internet access and mobile usage but also alters the likelihood framework to favour adoption by minimizing contextual uncertainty and facilitating wider digital acculturation (García-Merino et al., 2025).

Despite the significance of infrastructure investment, Vietnam faces inadequate infrastructure partly due to the inefficient use of infrastructure funding and the lack of infrastructure policies (Giang and Pheng, 2015). The current state of infrastructure cannot keep up with the FDI flow to the country (Pham, 2022). Infrastructure demand in Vietnam is extremely high, leading to additional investment capital for infrastructure development. However, based on the report by British Chamber of Commerce Vietnam (2021), the financial resources are limited due to the restriction in public expenditure to control public debt and the lack of interest of private firms in public projects, mainly because of the slow capital returns. These obstacles in both digital and physical infrastructure significantly influence perceived facilitating conditions, one of the most potent predictors of behavioural intention in UTAUT2 (García-Merino et al., 2025). Insufficient infrastructure diminishes people's confidence in the availability of supportive technical or institutional resources, resulting in decreased intent to utilize digital financial systems. Additionally, poor connectivity and system dependability can diminish performance expectations, a fundamental element of the TAM (Mondego et al., 2023), causing digital payments to seem less beneficial compared to conventional methods. To overcome this issue, it is essential to enhance the legal framework, ensuring political stability and regulatory quality and providing financial incentives to attract foreign investments as well as public–private partnerships.

First, a clear, stable, transparent regulatory framework on infrastructure planning and construction should be implemented to mitigate risks and build investor confidence. Policies to mitigate corruption should be prioritized, especially when financial resources are tight (Giang and Pheng, 2015). Moreover, a favourable legal and regulatory environment characterized by predictability, clarity and rules-based governance would stimulate private capital flows into digital infrastructure projects Oluyeju (2023).

Second, to encourage private sector participation in the construction and maintenance of digital infrastructure, one of the principal strategies is to create attractive financial arrangements that reduce investment risk and improve potential returns. For instance, as Yoshino et al. (2022) proposed, implementing tax-sharing schemes can allow government and private investors to share financial benefits and risks associated with digital infrastructure projects. This type of instrument is critical in times of fiscal stress, such as during the COVID-19 pandemic, when public budgets are under pressure, thereby making private capital essential to fill investment gaps (Yoshino et al., 2022).

This paper aims to compare the evolution of a cashless society in Vietnam and other Southeast Asian countries and then evaluate the transformation process. It is evident that the promotion of digital financial inclusion significantly influences the ongoing digital transformation in the ASEAN region. Indeed, the results in this paper show the rapid growth of the cashless payment system in the area. The evolution of adopting cashless payment in Vietnam is similar to that of other ASEAN countries, divided into three phases: initial adoption, transition and acceleration. However, it started later than other countries like Singapore, Malaysia and Thailand. However, thanks to the government's initiatives, such as launching NAPAS and supporting the development of e-wallets, cashless payment is adapting quickly in Vietnam.

Moreover, the investigation of cashless payment solution implementations in Vietnam using the three pillars shows a high level of novelty of the payment technology solution but a low level of implementation in the environment, digitalization and national infrastructure status. This finding indicates both government efforts and obstacles the country needs to overcome to achieve the national target of a cashless society for 2021–2025. First, various campaigns have taken place nationwide to encourage cashless transactions in traditional markets, retail stores, supermarkets, eating and dining destinations and, more importantly, in mountainous and rural areas. Second, the government supports the development of the latest technology, such as contactless chip cards, eKYC solutions, digital payments, e-wallets and QR codes.

However, access to a cashless payment system is still restricted to the micro and small-scale businesses, the senior citizens and the mountainous and rural areas. To meet the target of non-cash payment in Vietnam by the end of 2025, coping with the habit of resistance to switch to the cashless payment system is crucial. A suggestion is the promotion of digital literacy to financial service providers and consumers. Besides, legislative frameworks need enhancement to regulate the technology's usage and improve the interconnectedness of digital payment systems. The regulations should focus on consumer protection and data security. They should foster fair competition among payment providers and ensure the transparency of users' transactions as well as the ease of use. Additionally, it is necessary to propose policies to mitigate potential risks that the innovation in payment methods might cause, including investments in digital infrastructure to prevent data breaches and the use of analytics to signal policy-making. Besides, the government should address the challenges of capital investment in infrastructure with regulatory frameworks to enhance the use of infrastructure funding and attract foreign investors.

This study provides insights into the implementation of cashless payment in Vietnam. It offers implications to policymakers, financial service providers and consumers, but limitations must be addressed. Information in this study is collected from business, academic and government press, research, policy articles and observation. It may not be able to capture the diverse perspectives of Vietnamese citizens on adopting cashless payment. Future research can conduct deep interviews or surveys with financial service providers and consumers to better understand their motivation to switch to cashless payment systems. This paper also highlights the challenges that hinder the success of a cashless society transition in Vietnam and offers some recommendations to cope with them. Future studies may explore each challenge and evaluate the effectiveness of the mitigation challenges. Lastly, while this research studies Vietnam, future research can compare across cultures to identify the cultural variations in cashless payment adoption.

While this study provides a national-level assessment, several limitations should be acknowledged. First, the classification of “high” and “low” within the three-pillar framework, although based on defined thresholds, retains elements of subjectivity and may oversimplify intermediate cases. Second, the analysis relies heavily on secondary data and limited field observations; it does not fully capture consumer perspectives across diverse demographics, especially rural and ethnic minority groups. Third, given the rapid pace of Fintech innovation, findings may quickly become outdated as new technologies and policies emerge.

Future research could address these limitations by conducting large-scale surveys or in-depth interviews with both consumers and small retailers to capture behavioural drivers and barriers better. Comparative studies of late adopters in ASEAN, such as Cambodia or the Philippines, would further contextualize Vietnam's progress. Finally, longitudinal research on the implementation of cross-border QR payment agreements and the impact of 2023–2025 digitalization policies would offer valuable insights into the sustainability of Vietnam's transition towards a cashless society.