CHAPTER 1
TOPIC INTRODUCTION
1.1. Necessity of the topic
With the development of information technology today, e-banking in general and payment via TTD in particular will help diversify services and increase advantages for banks. Therefore, if any bank develops this service well, it will have a great competitive advantage over other banks. However, the reality shows that TTD services have not really developed strongly in Vietnam. Therefore, finding out the factors affecting the decision to use TTD in Vietnam is of great significance in helping banks to develop appropriate and effective marketing policies, contributing to promoting the development of TTD services in Vietnam.
As of the third quarter of 2018, the total number of cards issued has reached 147.3 million, an increase of 11.59% compared to the beginning of the year (SBV, 2018). The number of cards issued has continued to increase rapidly in recent years, along with the payment trend gradually changing from cash to non-cash. Of the more than 147.3 million bank cards mentioned above, more than 90% are debit cards, meaning that other types of cards such as TTD only account for a very small part. While Vietnam's population has more than 70 million adults, the growth rate of income and spending is among the fastest in the region. This shows that the room for the TTD market is still large and the race to compete for market share in this market has just begun.
After more than 10 years of participating in the market, VietinBank's card business has grown significantly in both breadth and depth. Thanks to its outstanding utilities, VietinBank has become one of the leading banks in Vietnam with 28.9% market share of international credit cards; 29.9% market share of developing card acceptance machines (POS). However, in recent years, small banks, foreign banks and even recently domestic financial companies and foreign financial institutions have also jumped in, ready to compete fiercely to quickly seize credit card market share. For example, Shinhan Bank has the ambition to be in the top 3 credit card issuers in the next 3 years in Vietnam. FE Credit and Home Credit, the 2 leading consumer lending companies, are also promoting credit card issuance with many incentives and promotions. Lotte Card, through the acquisition of Techcom Finance, has become the first Korean financial company licensed to issue credit cards in Vietnam...
Faced with increasingly fierce competition, Vietinbank needs to have truly effective policies to maintain and improve its current position in the TTD market. To come up with such policies, understanding the psychology and behavior of customers is extremely important. Therefore, I chose the topic: " Factors affecting the decision to own and use TTD of customers at Vietnam Joint Stock Commercial Bank for Industry and Trade in Ho Chi Minh City " as my graduation thesis, in order to help bank leaders have a detailed view of the factors affecting the decision to own and use TTD of customers at Vietinbank, as a basis for building an effective and sustainable development strategy.
1.2. Research objectives and questions General objectives:
Identify factors affecting customers' decisions to own and use TTD at Vietnam Joint Stock Commercial Bank for Industry and Trade in Ho Chi Minh City and the level of influence of those factors to propose solutions and recommendations to develop the TTD market share of Vietnam Joint Stock Commercial Bank for Industry and Trade.
Specific objectives:
- Identify factors affecting customers' decisions to own and use TTD at Vietnam Joint Stock Commercial Bank for Industry and Trade in Ho Chi Minh City.
- The level of influence of factors on customers' decision to own and use TTD at Vietnam Joint Stock Commercial Bank for Industry and Trade in Ho Chi Minh City.
- Propose solutions and recommendations to develop the market share of TTD of the Bank.
Vietnam Joint Stock Commercial Bank for Industry and Trade in today's fiercely competitive environment.
Research subjects:
Factors affecting customers' decision to own and use TTD at Vietnam Joint Stock Commercial Bank for Industry and Trade in Ho Chi Minh City.
Survey subjects:
Customers who own and use TTD of Joint Stock Commercial Bank for Industry and Trade
VN.
Research scope:
The study was conducted at Vietnam Joint Stock Commercial Bank for Industry and Trade in the city.
Ho Chi Minh City, the largest financial and economic center of the country.
Research question:
- What factors affect customers' decisions to own and use TTD at Vietnam Joint Stock Commercial Bank for Industry and Trade in Ho Chi Minh City?
- What is the level of influence of those factors?
- What should be done to develop the market share of the Joint Stock Commercial Bank for Industry and Trade?
Vietnam today.
1.3. Research method
The study was conducted based on a practical approach to information collection combined with econometric model analysis to draw conclusions.
Refer to previous studies
TTD has a history of hundreds of years of development in the world. The problems that the Vietnamese card market is facing have also been studied by many economists in the world. Based on previous studies, the author will choose the model that is considered most suitable for the current Vietnamese TTD market to include in the quantitative research. The results of the regression and testing process will indicate whether the selected model is suitable or not, and if the model is suitable, what are the directions and levels of influence of the factors.
Some selected studies for specific reference are as follows:
Research by Kara et al (1994) : Kara et al. (1994), in their study of TTD development strategies for the youth market, interviewed 102 college students in South Florida, and 127 college students in South Central Pennsylvania. The results showed that interest rate was one of the biggest factors influencing the decision to use TTD of these subjects.
Research by Okan Veli Safakli (2005) : In 2005, Okan Veli Safakli conducted a study to determine the factors affecting the demand for electronic payments among people in Northern Cyprus. The results showed that seven factors affected the demand for electronic payments among people here, of which the factors related to the convenience of electronic payments (spend first, pay later; no need to carry cash; can withdraw cash when needed) had the greatest impact.
Research by Abdul-Muhmin and Umar (2007) : In 2007, Abdul-Muhmin and Umar conducted data collection through a NH-sponsored survey using a self-administered questionnaire structure. The results showed that except for nationality, all
All variables are significantly related to TTD ownership and use. In particular, TTD ownership rates increase with age, income, and education, confirming the expectations in the hypothesis.
Quantitative research
Data were collected by distributing questionnaires, interviewing to collect data and processing data. The questionnaire was designed to include 2 parts: part 1 includes demographic information of respondents such as: age, gender, marital status, occupation, average income..., part 2 includes questions using a 5-level likert scale (level 1: completely disagree, level 5: completely agree).
The survey sample was selected by the convenience method. There will be 700 questionnaires distributed to customers, friends, relatives who are considered to be able to use TTD of Vietnam Joint Stock Commercial Bank for Industry and Trade living and working in Ho Chi Minh City and the collected data will be processed by SPSS software.
The study focuses on two main objectives: ownership and usage of TTD. In which, the issue of TTD usage is expressed through three criteria including the purpose of card use, the level of card use and the tendency to maintain balance. In addition, it also aims to assess the level of influence of TTD attributes on card ownership and usage. To determine the factors affecting the decision to own TTD, Chi-square test will be used to examine the relationship between the considered factors (independent variables) and the ownership of TTD of customers (dependent variable). In addition, the binary logistic regression model is also used to quantify the level of influence of the considered factors on the decision to use TTD of customers. From this regression model, the author will draw a model to predict the probability of customers owning TTD of Vietinbank. In order to examine the purpose of using TTD of customers, the author will use frequency analysis to find out the card usage needs that are most interested by customers. In order to determine the factors affecting the level of TTD usage of customers, the author will use one-way Anova to analyze the difference between customer attributes for their level of TTD usage. In order to determine the factors affecting the trend of maintaining the balance of customers, the Chi-square test will be used again to examine the relationship between the factors considered and the trend of maintaining the balance of customers.
customers. And to assess the level of influence of TTD attributes on customers' decisions to own and use TTD, the author will use the mean test and multivariate regression model to determine the TTD attributes that influence customers' ownership and use of cards as well as their level of influence.
In addition, the author also uses the method of analysis, comparing data fluctuations over the years, secondary data statistics collected through reports and magazines, internal reports of banks to determine factors affecting the use of TTD.
1.4. Structure of the thesis
In addition to the summary and conclusion, the structure of the thesis includes 5 chapters as follows:
Chapter 1: Topic introduction
Chapter 2: Overview of TTD and current status of TTD usage at Cong Thuong Commercial Joint Stock Bank
Vietnam trade today
Chapter 3: Theoretical basis and research methods Chapter 4: Analysis, factor selection and model results Chapter 5: Solutions and recommendations
1.5. Significance of the topic
The results of the study aim to help managers of Vietnam Joint Stock Commercial Bank for Industry and Trade identify factors affecting customers' decisions to own and use TTD as well as their level of influence in order to develop appropriate policies and strategies.
Besides, it is also the premise for other studies on customer psychology and behavior in choosing to use other services of Vietnam Joint Stock Commercial Bank for Industry and Trade in the future.
Chapter 1 Summary:
Chapter 1 also presents in detail the necessity of the research topic, objectives and research questions; introduces the research method, research objects and scope, thesis structure and scientific value of the topic.
Thus, the author has briefly introduced the research topic to help readers have an overview of the topic as a basis for the following chapter 2, which analyzes the overview of TTD and the current status of TTD usage at Vietnam Joint Stock Commercial Bank for Industry and Trade.
via
CHAPTER 2
CURRENT STATUS OF CREDIT CARD USE AT JOINT STOCK COMMERCIAL BANK
VIETNAM TRADE TODAY
2.1 Current status of Vietnam's TTD market.
2.1.1 Current status of issuance and payment of TTD in Vietnam during the period
Card issuance
In recent years, with the development of the internet and the system
Information technology, transactions via bank cards have been increasing strongly. Accordingly, the number of bank cards has also increased dramatically. According to statistics from the State Bank of Vietnam, at the beginning of 2016, the total number of bank cards issued was about 99.52 million cards, by the end of the third quarter of 2018, the total number of bank cards reached 147.3 million cards. That means that in less than 3 years, the number of bank cards has increased by 47.78 million cards, equivalent to more than 48% of the total number of cards issued during the period before 2016.
Figure 2.1: Total number of bank cards issued over time
Unit: Million cards
160
140
120
100
80
60
40
20
-
132
136
142
147
116
121
127
100
102
106
110
111
Source: Statistics compiled by the State Bank over the years
However, among the issued bank cards, TTD accounts for a very limited number. According to Circular No. 31/2013/TT-NHNN dated December 13, 2013 of the State Bank of Vietnam regulating statistical reports applicable to units under the State Bank of Vietnam and credit institutions, foreign bank branches, the data index on the cumulative number of issued cards does not collect details by scope and financial source. Although there is currently no official data on the number of issued TTD, based on data obtained before 2015, this can be seen.
Figure 2.2: Number of types of bank cards over time
Unit: million cards
80
70
60
50
40
30
20
10
-
73.6
61.1
63.2
66.3
69.8
- Debit card
- Credit card
- Prepaid card
2.43 2.67
2.52 2.86
2.77 3.04
3.04 3.26
3.29 3.51
IV/2013 I/2014 II/2014 III/2014 IV/2014
Source: Compiled from statistics of the State Bank
According to statistics from the State Bank of Vietnam, at the end of 2014, out of a total of 80.39 million bank cards issued, credit cards had the smallest number with 3.29 million credit cards, accounting for 4.09%, while debit cards had 73.59 million cards, accounting for 91.54%.
Figure 2.3: Bank card structure at the end of 2014
4.09% 4.37%
- Debit card
- Credit card
- Prepaid card
91.54%
Source: Compiled from statistics of the State Bank
Although it accounts for a small proportion of the total number of issued bank cards, it must be recognized that the growth rate of TTD is increasing faster than other types of cards. While at the beginning of 2014, the number of TTD cards issued was 2.43 million cards, accounting for 3.81% of the total number of bank cards, by the end of 2014 this number was 3.29 million cards, accounting for 4.27%. These figures also show that, just
In 2014, the total number of TTD issued cards reached 0.86 million, equivalent to 35.39%
Total TTD issued in the previous period.
Figure 2.4: TTD ratio in total number of bank cards in 2014
4.40%
4.30%
4.27%
4.20%
4.10%
4.00%
3.90%
4.16%
3.99%
3.80%
3.70%
3.60%
3.50%
3.82%
3.81%
IV/2013 I/2014 II/2014
III/2014
IV/2014
Source: Compiled from statistics of the State Bank
Although the number of cards issued is growing relatively rapidly, in general, the TTD market in Vietnam is still young. After more than 20 years of formation and development, TTD is still not popular with the majority of Vietnamese people in general but only concentrated in big cities. The evidence is that the TTD ratio of the adult population in Vietnam is very low.
Table 2.1: Ratio of TTD/adult population in Vietnam over the years
Ratio of adult population to total population
75% | ||||
Year | population | Adult population (>= 15 years old) | Quantity TTD | Proportion TTD/DS Chief wall |
2014 | 92,423,338 | 69,317,504 | 3,290,000 | 0.0475 |
2013 | 91,378,752 | 68,534,064 | 2,430,000 | 0.0355 |
2012 | 90,335,547 | 67,751,660 | 1,620,000 | 0.0239 |
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Source: Compiled from statistics of the State Bank and website https://danso.org
Although the TTD/adult population ratio in Vietnam is on the rise, it is still very low compared to the TTD prevalence in other countries in the world. In developed countries such as the US, Japan, and South Korea, on average each person has more than 2 TTDs.