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Compare Payment Items Between Unc And Unt


Table 2.7: Number of items paid by check

Unit: number of items



Target


2011


2012


2013

Difference in 2012 vs.

with 2011

Difference in 2013 vs.

with 2012


Absolute

Relative (%)


Absolute

Relative (%)

Check transfer

358

804

842

446

124.58

38

4.73

Guaranteed check

154

269

210

115

74.68

(59)

(21.93)

Total

512

1,073

1,052

561

109.57

(21)

(1.96)

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The explosion of the firecrackers


69.92


74.93


80.04


5.01


-


5.11


-

The number of people lying on the ground is very small.

The explosion of the firecrackers


30.08


25.07


19.96


(5.01)


-


(5.11)


-

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Compare Payment Items Between Unc And Unt

(Source: General Administration Department)


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Table 2.8: Sales paid by check

Unit: million VND



Target


2011


2012


2013

Difference in 2012 vs.

with 2011

Difference in 2013 vs.

with 2012


Absolute

Relative (%)


Absolute

Relative (%)

Transfer check (CK check)

412.5

418.5

415.2

6

1.45

(3.3)

(0.8)

Guaranteed check

267.5

272

284.5

4.5

1.68

12.5

4.6

Total payment by check

680

690.5

699.7

10.5

1.54

9.2

1.33

Percentage of employees working in the company (%)

The explosion of the firecrackers


60.66


60.61


59.34


(0.05)


-


(1.27)


-

Percentage of total revenue (%)

The explosion of the firecrackers


39.34


39.39


40.66


0.05


-


1.27


-

(Source: General Administration Department)

For bank transfer checks


Transfer checks are applied in 2 payment ranges (within a province or city). However, with simple procedures and no need to deposit a sum of money, it gives users more flexibility in using their money. Perhaps that is the reason why this form is more popular than guaranteed checks at the State Bank of Vietnam, Soc Son branch.

The ratio of Cash on delivery by check/Total payment by check tells us how many out of 100 dong paid by check are paid by check. Through table 2.7 and table 2.8, we can see that check is used more than guaranteed check. This superiority is shown through both the number of items and payment turnover. In detail, the number of items paid by check has increased steadily over the years, but the payment turnover by check has decreased slightly over the years. The reason is that the number of payment items is high but the payment value is small, leading to uneven growth in the payment method by check.


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On the other hand, issuing a money order check is very simple so as a buyer, they prefer to pay by money order check

For certified checks

A certified check is a check that is guaranteed by the issuer's bank that there are sufficient funds in the account to cover the payment. In this case, the bank writes or stamps the check.

The ratio of Certified Check Sales/Total Check Payments shows how many out of every 100 dollars paid by check are paid by certified check. However, for the Soc Son branch of the State Bank of Vietnam, the number of payments by guaranteed checks has gradually decreased over the years (in 2011 it accounted for 30.08%, in 2012 it decreased by 5.01% compared to 2011 and in 2013 it decreased to only 19.96%), the payment turnover by guaranteed checks has almost no fluctuation although the scope of payment by guaranteed checks is wider than payment by transfer checks and is guaranteed, there is no situation of issuing more than the balance, but perhaps due to the customer relationship characteristics of the Soc Son branch of the State Bank of Vietnam, the payment coefficient by guaranteed checks is always lower than the payment coefficient by transfer checks in the years 2011, 2012, 2013. To overcome this imbalance, at the branch, the deposit amount is deposited in the payment account of guaranteed checks to receive interest, to reduce the loss for customers when there is an amount of money deposited without generating interest.

2.2.2.2. Payment by UNC

UNC is widely used in money transfer transactions within the same system or other banking systems. Businesses receive many incentives when using UNC: free transfers within the same system, reduced transfer fees for large customers. UNC accounts for about 80% of total non-cash payment transactions at the Soc Son branch of the State Bank of Vietnam.

In terms of qualitative indicators

Safety and accuracy: at the Soc Son branch of the State Bank of Vietnam, UNC is one of the non-cash payment methods considered to be highly safe and economical, with few errors in the process of checking procedures. At the same time, customers are also quite satisfied with the payment method using UNC, so most of the current sales transactions mainly use this payment method.

Minimize payment risks: payment procedures using UNC are quite simple, fast, and compact. Bank staff do not make many mistakes in this payment method, so operational and payment risks are almost non-existent.


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Ensure fast and timely: due to the large demand of customers in payment activities by UNC, to meet that, the branch has appropriate policies, the expertise of bank staff has also been improved so payment activities are guaranteed to be fast and timely.

In terms of quantitative indicators

Similar to check payments, UNC payment fees are also competitive. Moreover, UNC payments account for the largest proportion of both the number of payments and the payment volume in total non-cash payments. This shows that customers really like this form of non-cash payment.

Chart 2.2: Payment by UNC


Unit: number of items


100,000

25,000

20268.7

80,000

18088.5

16125.9

20,000

60,000

15,000

40,000

10,000

number of items

sales

20,000

5,000

0

54859

66367

78547

0

2011 2012 2013

(Source: Data from table 2.5)

Based on Table 2.5, Table 2.6 and Chart 2.1, the coefficient of TT Sales by UNC/Total Non-Cash Payments tells us how many VND are paid by UNC in 100 VND of non-cash payments. The higher this coefficient, the better. At the State Bank of Vietnam and the Rural Development of Soc Son, this coefficient has not fluctuated much over the years. However, in terms of the number of items that the bank has made, UNC has increased significantly over the years. In 2011, it was 54,859 items, in 2012, it increased by 11,508 items compared to 2011, and in 2013, it continued to increase by 12,180 items compared to 2012, which was 78,547 items. In terms of payment turnover, UNC has also increased steadily over the years. This shows that customers still prefer to use the payment method by UNC for total non-cash payments. The reasons are:

The payment order execution period is agreed upon by the payment service provider and the payment service user.


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The payment scope of the payment order is applied quite widely, payment within the same bank, payment between banks in the same or different systems, payment through deposit accounts at the State Bank.

Simple payment procedure. After the buyer completes receiving the goods, he/she will create a payment order requesting the bank to deduct money from his/her deposit account to pay the seller.

Payment content is very diverse, payment for goods, services, money transfer, capital transfer, obligations to the State Bank... so UNC's payment turnover accounts for a high proportion and the number of items involved in the transaction is also large.

2.2.2.3. Payment by letter of credit L/C

In terms of qualitative indicators

Safety and accuracy: legally, the payment method by letter of credit L/C is given special attention by bank officers, so safety and accuracy are very high, with few errors.

Minimize payment risks: due to complex payment procedures, often used in international payments, bank officers closely control payment procedures, thereby minimizing legal risks and operational risks.

Ensure fast and timely: because the time to carry out this transaction is longer than other forms of payment, the risk is also higher. However, in the payment method by letter of credit L/C, bank officers pay special attention and care so that payments by letter of credit L/C are guaranteed to be fast and timely.

In terms of quantitative indicators

Payment by domestic letter of credit is rarely used at commercial banks as well as at the Soc Son branch of the State Bank of Vietnam. The amount and number of items account for a very small proportion, insignificant compared to non-cash payments. When using this form, customers (buyers) must deposit a sum of money in the "Letter of Credit Payment Guarantee" account without receiving interest, causing capital congestion for customers. That is the reason why payment by letter of credit L/C is rarely used in non-cash payments.

The number of payment items in 2011 was 5 items, in 2012 was 6 items but in 2013 it decreased to 1 item. Payment turnover also fluctuated over the years. In 2011 it was 453.1 million VND, in 2012 it decreased by 52.2 million VND compared to 2011 to 400.9 million VND, in 2013 it increased to 407.8 million VND. Thus, in 2013 the number of payment items by letter of credit L/C was very small, only 1 item but the payment value

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by letter of credit was almost as large as in 2011 and 2012. This shows that the value of payment by letter of credit L/C in 2011 and 2012 was quite small.

2.2.2.4. Payment by UNT

UNT is a payment document issued by the seller to authorize a payment service provider to collect an amount of money from the buyer corresponding to the value of goods and services provided.

In terms of qualitative indicators

Safety and accuracy: simple payment procedures, bank staff do their job well in payment so errors rarely occur.

Minimize payment risks: because the payment method by UNT is only applicable to small payments or reputable partners and at the Soc Son Branch of the State Bank of Vietnam in general and bank staff in particular cannot ensure correct, sufficient and timely payment to exporters, the risk in payment activities is quite high.

Ensure promptness and timeliness: due to the nature of UNT payment activities relying on the reputation of the partner, the branch cannot meet the goal of ensuring promptness and timeliness.

In terms of quantitative indicators

Because banks cannot guarantee the rights of exporters, and UNT is only applied to small payments or to reputable partners, the volume of non-cash payments is usually very small. Although the fee for using UNT payment is small, it is not enough to attract more customers to use this service. Therefore, the number of items and the volume of payments using UNT often account for a very small proportion of the total non-cash payments.



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Chart 2.3: Payment by UNT

Unit: million VND


20

250

199.7

207.1

15

171.2

10

200

150

100

50

0

number of items

sales

5

0

8

12

15

2011 2012 2013


(Source: based on table 2.5)

The ratio of TT Sales by UNT/Total non-cash payments tells us how many VND are paid by UNT out of 100 VND of non-cash payments. The higher this ratio is, the better. However, through Table 2.5 and Table 2.6, we see that the payment method by UNT at the Soc Son branch of the State Bank of Vietnam accounts for a very small proportion of total non-cash payments in terms of both payment proportion and number of payment items (the number of payment items is very small, almost 0%; the payment turnover by UNT also does not exceed 1% of the total non-cash payment turnover at the branch).

In reality, we see that this form is used to collect money for goods and services periodically and has the effect of accurately measuring electricity, water, telephone, etc. Thus, the service users regularly follow the motto "use first, pay later". That also partly explains why UNT is rarely used in non-cash payments at branches.

We can give a comparison chart of number of items and payment turnover between UNC and UNT


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Chart 2.4: Comparison of number of payments between UNC and UNT

Unit: Number of items


78,547

80,000

66,367

60,000

54,859

40,000

UNC UNT

20,000

8

12

15

0

2011

2012

2013

(Source: based on table 2.5)

Chart 2.5: Comparison of payment turnover between UNC and UNT

Unit: million VND


25000

20268.7

20000

15000

10000

18088.5

16125.9

TT Sales in UNC TT Sales in UNT

5000

0

171.2

199.7

207.1

2011 2012 2013

(Source: based on table 2.5)

Through the chart above, we can see a huge difference between UNT and UNC. The reason for such a big difference is that UNT is only used in collection services between consumers of goods and services for those who use those goods and services (reflected in the pre-agreed contract between the supplier and the consumer). This form is extremely complicated and cumbersome, not suitable for banking activities in a market economy, only suitable for the State Treasury or procedures applied in foreign trade. Therefore, the payment method by UNT is less applied than the payment method by UNC.


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