The central bank is pushing forward with its plan to increase consumer coin usage by urging the government stop issuing low denomination paper notes, in a bid to empty peoples’ pockets of old money.
One size fits all: SBV is hoping to boost the use of coin-operated machines in Vietnam
Nguyen Thi Kim Phuong, deputy governor of the State Bank of Vietnam (SBV), said the proposal was one of the measures being taken to increase coin usage in major cities as a way to encourage producers and service providers to install vending machines, which allow people to purchase goods automatically.
The proposal will be sent to the government after the SBV consults other countries on coin circulation strategies.
Phuong said local people have not grown accustomed to using coins because of a lack of coin-operated equipment. Coins are also seen as being a burden and easily lost, and there are a large number of shops and service providers who do not accept coin payments.
Phuong said that on average, there are four coins per person in Vietnam, but transactions paid with coins are still limited due to the firmly established consumer habit of using low denomination paper money.
“This issue cannot be dealt with in a short time following the decades of note use in the country,” said Phuong.
Late last year, there was a rumour that the bank asked the government to stop issuing low-denomination paper notes, hoping that the public would then have no other choice than to use coins.
Phuong said the bank aims to promote coin use in general, not just coin-operated equipment. It also hopes that coins will increase the life of currency, reduce issuing costs and prevent counterfeiting.
The central bank issued coins at the end of 2003 with denominations’ of VND200, 1,000 and 5,000. Coin transactions have become common in some state-owned retail centres such as supermarkets and shops, and non-state owned electronic games centres, mainly in Ho Chi Minh City and Hanoi. However, coin use is making little headway in rural areas.
For the time being, there are some coin-operated drink and automatic condom machines installed in Ho Chi Minh City and Hanoi, but the use of these machines is low. On average, there is only a maximum of five people using coins to buy condoms from the machines each day, and the use of coins is less popular in Hanoi compared to Ho Chi Minh City.
The Vietnam Post and Telecommunication Corporation (VNPT) and Saigon Post and Telecommunication Corporations have also put together a plan to develop coin-operated phone bases. However, their plans are yet to come to fruition.
According to a source from VNPT, a plan has been formulated, but its developers are yet to submit a report, and it is expected that the proposal’s development will take some time, due to the payment method and security issues.