Having just received 20 million VND in salary half a month ago, when checking her account, Thanh Huyen was surprised to see that there was still more than 1 million VND left.
The 27-year-old woman in District 3, Ho Chi Minh City described the feeling as "like being robbed" because she did not think she could spend almost all her salary in just half a month. Looking up transactions, Huyen discovered that she had made more than 100 orders to buy clothes, shoes, food, cosmetics, plane tickets and hotel rooms for her upcoming trip. Many of the transactions were "closed" by her at dawn while surfing social networks.
The female office worker has had the habit of not carrying cash for about three years now, when money transfer applications, QR code scanning or e-wallet payments became popular. All of Huyen's expenses take place on her phone.
But since then, the girl who used to spend only 10 million VND per month often runs out of money before the end of the month.
"I thought I would spend money out of sight and out of mind, but it turns out I spend more because there are card swiping machines or money transfers everywhere," Huyen said.
Thanh Huyen is scanning a QR code while shopping for clothes in Ho Chi Minh City, early March 2024. Photo: Character provided
Two years ago, Bao Chau, 40, from Hai Phong, still used cash. Every month when she received her salary, the mother of one divided the necessary expenses and saved the rest.
But since receiving her salary through her bank account, Chau has started to prefer online payments, causing her scientific spending plan to go bankrupt. The total salary of 30 million VND per month that the couple used to be able to save nearly 50% of, but now she spends it all every month. From electricity and water bills, paying children's tuition, buying clothes, food, even lending money to friends, all are transferred by her.
"Before, every time I decided to buy something, I would calculate how much money was left in my wallet, consider whether to buy it or not, and I felt sad when I saw the money in my wallet gradually decreasing. But now, whenever I want, I scan the QR code or swipe my card, and after a few times the machine says the transaction cannot be completed, I realize my account is out of money," said Ms. Chau.
This phenomenon is called the Cashless Effect by Associate Professor Dr. Do Minh Cuong, former lecturer at the University of Economics, Vietnam National University, Hanoi - referring to people who tend to spend more when not using cash.
According to the financial site Nerd Wallet (USA), cash is a tangible piece of paper with attached value. When spending, the disappearance of the money from the wallet easily causes the "pain of payment". But with cards or online payments, transactions or debit notifications do not make consumers feel concerned and continue to overspend.
Dun&Bradstre's 2023 market research also found that people tend to spend 12-18% more when using cards instead of cash.
Mr. Cuong said that advances in digital technology and fast money transfers have made many people prefer to use cashless payments. This is also the trend of developed countries, which want to apply technology to make life more comfortable and convenient.
The 2023 Consumer Payment Attitudes Study, recently released by Visa, shows that the average time Vietnamese people spend no cash is 11 consecutive days a month, up nearly four times compared to 2022. 56% of respondents said they carry less cash, causing them to keep less money in their wallets and spend less cash. Also according to Visa data, 62% of respondents use QR payments. On average, Vietnamese people scan codes more than 16 times a month, 12-13 times higher than when using bank cards.
Notably, Vietnam leads Southeast Asia in cashless payments with 88% of people having used them; and is among the top countries with growth in new e-wallets.
FiinGroup data shows that at least 4 out of 5 people use e-wallets regularly, mostly young people (born between 1981 and 1996) and luxury customers. State Bank data shows that by the end of January 2024, the country had nearly 21,000 ATMs, down nearly 2% compared to the same period in 2023. The phenomenon of overloading at ATMs during holidays and Tet no longer occurs.
A customer scans a QR code at a coffee shop in Thanh Xuan district, Hanoi, and has the transaction receipt photographed by an employee, April 2024. Photo: Quynh Nguyen
"However, every problem has two sides. Online payment is fast and convenient, but there are still many risks such as overspending and falling into debt if finances are not managed wisely," said Mr. Cuong.
For Thanh Huyen, linking too many e-wallets and making uncontrolled purchases made her always live in debt, many times having to ask her parents for money or borrow from friends to get through the month. She said she tried to go back to using cash to manage her spending, but the difficulty in finding an ATM to withdraw money and the fear of losing it made Huyen give up early.
"Modern technology makes shopping convenient but also makes it harder to save money. Whether I carry cash or keep money on a card, I can easily take it out and spend it all," Huyen said.
In addition to spending money by bank transfer, Ms. Bao Chau also uses a credit card to satisfy her shopping hobby. However, not understanding the requirements for using the card and paying off her debt late caused her interest to increase. At one point, due to not controlling her spending, she had to pay up to 20 million in fines.
In addition to overspending, Associate Professor Dr. Do Minh Cuong also warned that dependence on online money transfers and payments also causes many people to face situations of transferring money to the wrong address, dialing the wrong number or becoming victims of property appropriation due to accessing strange links containing malicious code.
Since switching to online payment, Ms. Mai Anh in Thanh Xuan district, Hanoi has lost money many times, the most was dialing 200,000 VND and it turned into 20 million VND.
Experts advise individuals to manage their money according to the 50-30-20 rule, which means 50% of their salary should be spent on necessities, 30% on flexible spending, and 20% on savings and investments. These amounts should be kept separate and not pooled together.
"However, some extreme solutions such as using cash or dividing money into many cards should not be encouraged, because the more cards you have, the more you spend, even for those who use credit cards, they can incur debt if they do not pay on time," said Mr. Cuong.
Experts also said that it is best for each individual to clearly understand the features and uses of each type before using a bank card. Let scientific advances serve life instead of letting yourself "bear debt".
The Anh, 30 years old in Ho Chi Minh City, used to fall into debt because he used his card to pay for everything. But now, he has started to try to control his spending, hoping to have more savings to be able to buy a house before the age of 35.
Every time he receives his salary, The Anh puts aside the money. He keeps the 30% for his living expenses in a card and only spends within the allowed amount.
"This method helps me control my money effectively. When I run out of money, I know when to stop instead of buying and selling recklessly," said The Anh.
Quynh Nguyen
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