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ABSTRACT Thesis Title: Developing of online payment service for tourism businesses at VTC Pay

Pages: 73

Umniversily: Vietsam National Umversity

Graduate School: Intemational School

Date: October, 2019 Degree: Master

Graduate Student: Nguyen Thanh Thao Supervisor: Assoc Prof Dr Nguyen Van

Dinh

Keywords: online payment, customer behavior, mobile payment, payment methods,

electronic payment, information technology, digital, e-ecommerce, tourism industry With the explosive growth of the Intemet, electronic commerce (e-commerce) is an increasingly important segment of commercial activities on the web With over increasing popularity of online shopping, Debit or Credit card fraud and personal information security are major concerns for customers, merchants and banks; online

payment became the mosl essential part of growth cconomty

The purpose of this thesis is to introduce an overview of electronic payment, concepts

and benefits of electronic payment, and the author presents the electronic payment

infrastructure, clectronic payment sysloms and clectronic payment methods in Vielnam

The main contents of this thesis are to introduce theoretical background of online

payment, online payment serv

© providers in general and the current stalus of online payment service provider of VIC Pay and online payment solution for tourism business

in Vietnam.

ACKNOWLEDGEMENT

During the performance of this thesis, I have received much assistance from the people who help me to complete the thesis I could not finish this thesis without helping from them, so T wanted to express ny deep gratitude to those people

Kirst, 1 would like to express my most sincere thanks to the teachers of the Intemational School, Vietnam National University, [lanoi, who taught me and helped ime throughout the course

Next, [would like to express my most gratitude to my supervisors, to Assoc Prof

Dr Nguyen Van Dinh from Intemational School, Vietmam National University, Hanoi who supported me Urough the course of my research and gave me guidance and useful feedback to complete the thesis

Besides, T would like lo thank my MFMI classmates who shared documents and help me during the implementation of this research

Finally, Ï want to give my wishes for all teachers, hopefully they have good health and gain more successful in carcer, Again, sincorcly thanks!

Thank you!

Author Nguyen Thanh Thao

INTRODUCTION

1 The general context and reasons for choosing the research lopli eee 11

2, Establish and declare researehissues sestometnisinenenenities wetsees 12

CHAPTER 1: THEGRITICAL BACKGROUND AND LITERATURE REVIEW

= ẽ.ẽốẽ

LLL Research papers in Vietnam

LL2 Research papers in the wotÏd

1.2 Definitions of online payment and online payment service provider 16

13.2 Payment process through using traditional credit cards 19

1.5 ‘The role and importance of ontine payment and online payment service providers ine

1.6 Classification of online payment service providers 23

CITAPTER 2; RESEARCTI METHODOLOGY

2.1, Research methods

2.11 Data collection methads

2.1.2 Methad of processing data

CTTAPTER 3: ANALYSES ABOUT THE DEVELOPEMNT OF ONLINE PAYMENT

SERVICES OF VIC PAY AND PROPOSE THE SOLUTIONS TO DEVELOP ONLINE

3.3 ‘The factors affecting the provision of electronic payment services in Vienam 32

3.3.1 The competitive environment in the country and abroad „32

3.3.3 The safety issues wher using online payment 33

The factors related ta telecomnuinications network infrastructure 35 The factors related to legal infrastructetr a ecco ò 35

3.4 Types of online payment service prodaets on the markel for the tourism imdustry 36

3.41 Ondine payment solution jor service providers who want to authenticate and collect

.36

money right through the business website system

3.4.2 Online payment solutions for businesses without website: 36

3 Solution of infrastrucnere system for issuing prepaid cards 37

3.5 Rvaluale the situation and impacts of business environment factors on VTC Pay's

service provision for tourism DUSINESSeS cceccsesesssessiesenensnetenstieeenaseaseees BF

3.5.1 Introduction about VIC Pay

3.5.2 Overview of the situation related to the provision of online payment service of VTC

3.5.3 Factors affects VIC Pay's online payment service provision for tourism businesses

a AB

3.6.1 Status of products and services are provided by VIC Pay

„40

3.6.2 The current situation of tourism businesses in implementing online payment system 52

3.6.3 Situation of business ¢ iency of tourism businesses when implementing online

payment system 53

3.6.4 The situation of tupact assessment between environment and ondine payment wu 54

3.6.5 Evaluate the development of the online payment market in the tourism industry 56

3.7.1 The successes achieved fran: the pravision of online payment service of VTC Pay 87

3.7.2 The existing problems and weaknesses

3.7.3 Opportunities for development of VTC Pay

3.7.4 Threats for development of VIC Pay

3.8 ‘The sohttion for development of VIC Pay’s online payment services sp

3.8.1 General solutions for VIC Pay's online payment model

Enhancing PR and advertising activitics to attract business customers and ond consumers to

3.9.3 Training and promoting cooperation in developing online payment

APPENDIX UL LIST OF SURVEYED COMPANIES:

Công Ty Có Phần Việt Nam Booking Hà 0001 eeree

Công Ty 'NHH In Lịch Quốc Lế Dại Việt

Công !'y Cổ Phần Tập Đoàn Nam Phong

GolderToir & Cœnvcniien

Công Ty TNIIH Exoline

Công Ty TNHH Dn Lịch Hang A - AClass Travel

Công 1y Cổ Phần Phát Triển Thương Mại & Du Lich ‘Yam Nhin Viét Nam

Céng Ty Co Phan Du Lich Va TM Quậc TẾ Á Âu (ASIA HOI,IDAY TRAVEL)

Công Ty TNHH Cỗ Phần Truyền Thông Và Du Lịch Thiên Thai 25 -

Công Ty 'TNIIH OneTour Viet Nam

Công Ty CP Mặt Trời Việt Nam

Công Ty Có Phần Lữ Hành Thăng Long, 5- 25:2 s2 2222312221220 31 cre

Công 1y TNHH ATC Việt Nam

ông Ty TNHH Thuong Mgi Va Dich Vu Du Lich Vietmountain

Công Ty Có Phần Thương Mại Và Phát Triển Du Lịch Hà Nội (Handstou)

Công Ty'NHH Dịch Vụ Và Du Lich VIETSENSU

_APPENDIX 02: PHIẾU KHẢO SÁT

LIST OF TABLES

Table 1: The mamber of AM and POS by the second quarter of 2019

Table 3: List of companies providing online payment services in Vielnam 45 Table 4: Some legal documents related to online payment

Table 5: Results of statistical services are deployed by VIC Pay - 49

Table 6: Assess the salis{action level of the enterprise - - 31 'Table 7: Estimating the impact oŸ customer complaints and system downtime on business

satisfaction 52

Table 8: Assess the readiness of a tourism business 53

‘Table 9: ‘The growth rate of international tourists after implementing online payment

‘Yable 10; ‘The revenue growth rate after implementing online payment system 54

Table 11: The level of obstacles to the implementation of online payment in Vietnam

35

Table 12: The impact of online payment systems to business activities of tourism

LIST OF FIGURES AND GRAPHS

Giraph 1: The development of ATM and POS by the second quarter of 2019 31 Giraph 2: The đevelopment among lypes oỀ payHEE ooooieioroeoreoou22) Graph 3 The porcenlages among cach types of payment methods 33 Graph 4: The rate of using security measures in eMberprise ascent sasoe.35

Graph 5: VIC Pay Payment Gateway's growth in transaction volume and total value of

„48 Graph 6; Online payment transaction volume in China from 2009 to 2019 (in billion

PG B-wallet E-commerce

cob

DESCRIPTION Vietnam National University

Intemational School Automated Teller Machine

Point-Of Sale VIC Technology and Digital Content Company

VIC Hlectronic Payment Center Paymorit Service Provider Payment Galeway Blectronic wallet Blectronic commerce

Cash on Delivery

10

INTRODUCTION

1 The general context and reasons for choosing the research topic

Online payment comes along with the development of the Intemet and E-

commerce that is a developing new form of traditional clectronie payment Nowadays,

when e-commerce is growing strongly in the world, the new payment methods have

‘brought convenience, fast and economical for both businesses and consumers Besides

the traditional methods such as o-payrment transfers, ATM, POS or a guaranta, there are others forms of payment such as mobile, internet payment that are increasingly popular

in countries around the world

China is a neighboring country with characteristics similar to Vielen bul their

e-commerce in general and online payment in particular are ahead with a speed up to 5

creating shopping cart and support online customers Another important step in e-

commerce is that payment is still just traditional payment, delivery and receive money

at home or civilized than via bank transfer, payment by post

Ondine payment of Vietnam has only really started the first steps from the end of

2006 and the beginning of 2007 when a series of enterprises providing Paymnent.galeway

services were cstablished such as Victpay, Paynet, Mobivi, Fibo However, the

emergency of businesses massively appearance did not quickly bring online payment to

development in Vietram Enlerprises unavoidable reality “that which docs not” work perfunotorily and almost no development Only a few businesses with the right path like

TayNet, OnePay or VASC ean continue to develop and achieve cerlain successes And

1

VIC Pay is a brand powered by VIC Technology and Digital Content Company (VIC

Intecom) is such an enterprise, which provides online payment in Vietnam VIC Pay is the loading payment solution provider for merchants in Vietnam and provides various products, services to countries in region and worldwide VC Pay realized to be able to

successfully develop and international integration must be professional from the start

Therefore, VEC Pay has built a supplier model that conforms to the world standard

models In addition, VIC Pay also soon identified that tourism will be the industry that can develop the first onhne payment im Vietnam but not e-commerce Fach year,

Vietnam receives an average of 15.5 million international visitors - those who arc already

in the habit of paying online with intemational credit cards - will be the most potential

market for Lourisin businesses and online payment service providers Because of these sight judgments, V''C Pay has now become the leading enterprise in the online payment

market in Vietnam with more than 400 merchants (May 2019) in which the number of

tourism enterprises accounts for about 80 %

2 Establish and declare research issues

Tn the near future, Vietnam's tourigm indusiry is auming at bie uumber of 30

suillion international tourists to Vietnam each year and $0 million domestic tourists, this

‘will really be a potential market for payment development of online payment in Vietnam With its position as a market leader in Vietnam, VTC Pay is getting certain advantages

in the competition between online payment service providers With 10 years of

experience, but with only 3 years of online payment, VTC Pay has also been unable to

avoid shortcomings and the quality of products and services is not perfect Krom the above fact, in order to contribute to promoting the development of online payment in Vietnam, T decided to choose the topic "Developing online payment service for tourism businesses at VIC Pay” as the subjcot of their graduation thesis

3 Theresearch purposes

12

‘The purpose of the thesis is to systematize of theories related to online payment, online payment service providers, survey and research to clarify the status of online payment service provider model of VIC Pay in general and for tourism businesses in particular in Vietmam, thereby proposing solutions for developing online payment

services In order to reach these aims, the basic research tasks have been set up as follows:

© To syslemstze of theories relaled lo online payment, online payment

anethods and conditions for its developments m Vietnam

* To analyzes the establishment and development of VIC Pay in order to

evaluate its achievements and limitations

® To find out the development solutions for VIC Pay services in both quality

and quantity

© To figure out the solutions of online payment service for tourism businesses in Vietnam in general and in VTC Pay in particular

4, The research scope

Scape of spatial research: As a thesis of stidents' dissertation, the research scope

of the topic is of micro scale, limited to a certain enterprise Specifically, the research scope of the thesis is to study the theory, situation and propose solutions to develop

online paymicnt service provider model, focusing on developing online payment services

of VIC Pay and focusing on tourism businesses at VIC Pay

Scape of research on time: The limit of research on the time of thesis is the

surveyed data from 2017 to 2019 of VTC Pay, combined with external secondary data

in withm the past 5 years

5 ‘The structure of the research

Tn addition to the table of contents, lists of tables, diagrams, drawings, lists of

abbreviations, references and other appendices, the thesis's research topic consists of

three main parts:

13

Chapter 1: Theoretical background and literature reviews

Chapter 2: Research methodology

Chapter 3: Analysis about the development of online payment services of VIC Pay and propose solutions to develop online payment service for tourism businesses at

VTC Pay

14

CHAPTER 1: THEORITICAL BACKGROUND AND

LITERATURE REVIEWS

1.1 Theoretical background

1.11 Research papers in Vietnam

At present, there are almost no documents or direet scientific researches on online

payment and official online payment service provider models published Mostly

enterprises are self-proactively learning from different sources in the world and applying

cooperatively to deploy online payment service providers in Vietnam with international organizations and businesses

ven Vietnam universities have specialized training in e-commerce and are alsu

no official training courses on electronic payment Almost documents are still

summarized and translated from intemational universities, international research

organizations or businesses ol’ c-commerce in general and online payient in the world

in particular, ‘Ihe basic e-commerce textbooks of the University of Commerce and Foreign Trade University also spend a very small part to miroduce the current forms of

e-commerce in the world

Previous graduate thesis topics also focused on introducing the electronic

payment syslem of commercial banks in Vietnam such as "Solutions to improve the

quality of electronic money transfer payment at VietinBank Dong Da branch Hanoi”

by student Nguyen Thi Luc Binh - Banking Academy, or the topic “payment in e-

commerce” by Te Thi Duy Linh of GÓI, company referring lo the moans of payment in e-commerce and difficulties in applying e-commerce models in the world to e-commerce

in Vielriarn

1.1.2 Research papers in the world

A-commerce in general and online payment im particular in the world have

developed since 1998, 1999 — dat is booming period of Internel and dolcain comparries

15

in the world thanks to a solid technological foundation from traditional electronic payment from previous time Therefore, researches in the world on online payment are very intensive and scientific, Some online payment becks and documents such as Llectronic Payment System for Ll-Commerce by Donal ©’Mahony, Michael Peirce, Hitesh Tewari: The truth about Online Payments by Russell O’Brien; Electronic Bill

Presentment and Payment by Korel Terplan, New Payment World by Mary 5

Schaeffer, Payment System in Global Perspectives by Maxwell J Fry, Isaack Kilato and

author group:

The book “Electronic Payment System” for E-Commerce by the authors Donal

OMahony, Michael Peirce and Histesh Tewari has introduced quite sufficiently and in detail the technology and systems used to make paymonts via the internet The book is

written for researchers and industry experts to expand and develop new technologies in

this field

Meanwhile, the book “New Payment World” of Mary 8 Schaeffer gives us an

overview of the history of payment services around the world, the payment methods of

"yesterday", "present" and in the "future" around the world The book is a complete

introduction to system security techniques int Electronic Payment for different fields such

as finance, banking, securities, tax, customs or as business transactions and users in e-

commerce

1⁄2 Definitions of online payment and online payment service

provider

1.21 Definition of online payment

Accessing the concept of Online Payment, we need to better understand the

concepts of Electronic Payments in traditional trade and in eCommerce today According

to the Huropean Comuuission, electronic payment is understood as the implementation

of payment operations through electronic means based on the processing of electronic

16

data transmission From the above definition, we can leam the concepts of online

‘payment

According to the Ministry of Trade's National E-Commerce Technical Report,

"Online payment is the payment and receipt of goods for goods and services purchased

and sold on the Internet through electronic messages instead of for cash handover "

here are also other online payment concepts as follows: According to Net-

‘builder, a company that provides online services, “Online payment is a transaction of

goods and money in any form of through the online media’

1.2.2, Definition of online payment service provider

A payment service provider (PSP) offers online services for accepting electronic payments by a variely of payment methods including credil card, bank-based payments

such as direct debit, hank transfer, and real-time bank transfer based on online banking

Typically, they use a software as a service model and form a single payment gateway for

their clients (merchants) to multiple payment methods?

There are also other online payment concepts as follows: According to Net-

‘tuilder, a company that provides online services, “Online Payment Provider is a third

party that provides credit card transaction processing in real time on the behalf of

website/organization” 3

1.3 The theories of research problems

13.1 Online payment methods

a Online payment by cards

Online payment by payment cards is the simplest and also the most popular today Types of cards that can be paid online are:

- A credit card is a thin rectangular slab of plastic issued by a financial

company, that Icts cardholders borrow funds with which to pay for good and services

Credit cards impose the condition that cardholders pay back the borrowed money, plus

interest, as well as any additional agroe-upon charges

- A debit card is a type of card that has a direct relationship and is attached

to the deposit account This card when used to buy goods and services, the value of

transactions will be immediately deducted to the cardholder’s account through electronic devices located in shops and hotels simultaneously instant transfer funds to the hotel store account Debit cards allow the users to withdraw cash from automated teller machine

There are two basic types of debit cards: online and offline Online card is a type

of card whose value is immediately deducied from cardholder’s account The offline

gard is the type of card whose value is deducted from the cardholder's account a few day

later

4 Electronic check

An electronic check, also referred to as an e-check, is a form of payment made

via the Internet, or another data network, designed to perform the same fumclion as a

conventional paper check Since the check is in an electronic format, it can be processed

in fewer steps Additionally, it has more security features than standard paper checks

including authentication, public key cryptography, digital signatures, and encryption

among others

c Electronic Money

Flectronie money (e-memey) is broadly deliued as an electronic store of monelary value on a technical device that may be widely used for making payments to entities

other than the e-money issuer The device acts as a prepaid bearer instrument which does

not necessarily involve bank accounts in transactions

L-money products can be hardware-based or software-based, depending on the technology used lo store the monclary value

a Person-to-Person Payment (P2P Payment)

18

Person-to-person payments (P2P) is an online technology that allows customers

to transfer funds from their bank account or credit card to another individual's account

via the Internet or a mobile phone

e Electronic wallet (li-wallet)

E-wallet is a type of electronic card which is used for transactions made online

through a computer or a smartphone Its utility is same as a credit or debit card An H-

wallet needs to be linked with the individual’s bank account to make payments

Fewallet is a lype of pre-paid account in which a user can slore bris/her money for

any future online transaction, An E-wallet is protected with a password With the help

of an E-wallet, ane can make payments for groceries, online purchases, and flight tickets,

muơng others

fi Payment Gateway (PG)

sa user’s transfer of funds between

A paymenl gatewz service thai authoriz

financial institutions to sellers without direct delivery of either bank or credit card account information

Payment gateways allow the indirect use of bank accounts and credit card

accounts online at stores that offer both online and in-person retail purchasing, also

dmown as clicks and mortar, or traditional retail with only brick and mortar stores When

using a payincnl galoway, the user's financial dala is never submitied directly but transferred between a payment portal and the user’s bank or credit card The information

is transferred covertly and protected by encryption

1.3.2 Payment process through using traditional credit cards

in a payment operation using a credit card usually includes the following basic

(3) Business unit requires confirmation from the card brand organization and the transaction is paid by oredit Business units retain a sales slip

(4) The business unit transfers the sales slip to the accepting bank and pays

them a fee for this service

(5) The bank accepting payment requires the organization of the card

trademark except credit and payment After that, the card brand organization requested

the deducted amount with the issuing bank

(6) Amtorm tra ferred from issuing bank to card brand organivation, The

equivalent amount is deducted from the card holder's account at the issuing bank

In the traditional card payment system, the described process is only partially

automated However, when applying e-coumerve, the whole process must be fully automated on the intemet with a guaranteed method, During the e-payment process, the

computer requires the buyer to enfer the card's information to perform the payment

process However, this method raises a concem for customers as security issues when sending over the intemet

1.33 Methods of international payment aud application in traditional tourism

business

- Cash payment method is the simplest payment method tourists pay

dircetly money to Louristn businesses

- Card swipe at the POS counter method: As a traditional e-payment

method, tourists swipe ATM cards at POS machines at the transaction counter of tourism

‘businesses

- Money transfer method: A method in which tourists (who need to transfer

ameney) require their bank lo tansler a certain amount, of money Lo a {ourist service

provider (beneficiary) in one location determined by means of money transfer requested

by tourists

20

- Book entry method: A payment method in which a travel company opens

an account (or a book) to debit tourists after the tourism enterprise has completed the provision of tourism services, periodically buycrs will pay for the business

- Collection method: As a method of payment in which a tourism enterprise has completed its obligation to provide services to tourists, it authorizes its bank to collect the customer's money on the basis of draft of the enterprise

- Voucher credit methad: A payment method in which a bank (bank opens

a letler of credit) at the request of tounsts will pay a certain amount of money Lo

businesses providing travel sorvicos

1.4 Characteristics of online payment and online payment service

providers

L441 Characteristics of online payment

- Payment is not limited by space and time: From the perspective of e-

commerce, online payment activities are no longer restricted within a country, an area

that is connected on a global scale in 24 hours / day and 7 days / week

- Real-time payment Ouline payment is the payment system through the

computer network and the intemet achieves real-time payment speed A payment

transaction between the user and the card-accepting units in the two countries far apart

can be done ina couple of seconds aller the bulton is pressed to complete the transaction

- Lffective, convenient, easy to use: ‘Lhe cost per transaction is very small,

especially for low-value transactions

- Flexibility, unity and reliability: Provide many convenient payment

methods for all subjects with a unified application interface and avoid unnecessary mistakes

1.42 Characteristics of online payment service providers

Online payment service provider model must follow certain intemational standards of payment Tn ordsr for an online payment servies provider to be accepted

21

and connected with international payment organizations, they must build a model according to intemational payment organizations and meet the standards prescribed by PCI DSS! regulation

Online payment solution provider is an intermedate payment, service provider

and online payment support solution So this service is very interest to small-scale online

businesses, especially those who are new to this business The supplier's business revenue is entitled to the percentage of payment value and the mmber of customer's

transactions,

1.5 The rule and importance of online payment and online payment

service providers in c-commerce activitics

15.1 The role and importance of online payment

By applying information technology, internet and inter-bank computer network

in business, online payment service providers have created an effective payment channel

in e-commerce ‘Thereby e-commerce businesses can easily build a complete sales process in e-commerce Moreover, Online payment plays an increasingly important role

in the development of the digital economy:

Online payment plays an important role in e-commerce activities, it is considered

as a necessary condition for e-commerce to develop comprehensively The fact that s- commerce is dilficull to promote all its advantages without the online paymeril system

with strong capacity ‘The speed of e-commerce development is fast or slow depends very

auch on online payment to help businesses and consumers make the mosl of the benefits

of this business method

Moreover, online payment is not only considered as an element of e-commerce

promotion but also plays an important role in the modemization of the payment system,

thereby enhancing the competitiveness of enterprises , commercial banks, credit institutions in the banking and financial services industry

22

or the economy in general, online payment is seen as an important payment channel, contributing to promoting the development of a non-cash economy Online payment will contribute to reducing the amount of cash in circulation, reducing the cost

of printing and issuing paper money, contributing to curb inflation and meet payment

efficiency in the economy to promote Production of goods and online commerce is more developed

15.2 The role and importance of online payment service provider

The online payment serv

se provider plays a very imporlant role in promoting e-

commerce development and accclerating the implementation of the govermment's non-

cash economic project For an e-commerce enterprise, online payment is considered to

Ye the most critical stop to complete (he c-commerce process in a professional mmnmer For businesses, especially small and medium enterprises, it is ahnost impossible to

deploy an online payment syslem when they lack and weak both in human resources,

technology and budget The presence of online payment service providers has opened a new direction, a new solution for e-commerce development of businesses They may not

have to invest a lot of money and effort but still have a high-quality, secure and secure

online payment system

Another important role of online payment service providers is an intermediary beiweon parties including cardholders, card issuing banks, intornational vard organizations, card acceptance units and Bank payment It makes the payment process

simple, fast, convenient, safe and economical

For an cconomy, online payment service providers are an important link to ercate

a convenient, reasonable and secure new payment channel in addition to financial banks

and credii institutions contribule {0 acceleraling the process of economic modernization and creating a civilized and transparent environment in payment

1.6 Classification of online payment service providers

23

‘There are three types of online payment service providers that are direct providers

of Online Payments, intermediate providers of anline payment services and third parties providing online payment services

Direct Providers of Online payment services are usually units directly providing online payment services such as commercial banks or credit institutions Completed orders will be sent from the selier’s website to the bank via Payment Gateway

Intermediary service providers act as an intermediary between businesses and

direct, providers Bussinesses cari use this service and pay a discount rate of 2% -5%

A thurceparty online payment service provider is a business or organization that

transfer the credit card payment pracess from an order on a website by its own account,

then the payment of customer will be donc through the merchant account Businesses

will not need to be concerned about the authenticity of credit card holders because service providers will be direct sellers, while the seller bras becorne au agen

24

CHAPTER 2: RESEARCH METHODOLOGY

2.1, Research methods

214 Data collection methods

In the process of collecting data for the study and implementation of the thesis topie, the author used the following data collection methods as below:

Methods af investigating primary data:

- Survey: Send to tourism companies and e-commerce businesses who are VIC Pay’s customers via email (Sample of survey form is attached in the Appendix) Specifically, the questionnaire method is as follows

© — Purpose of using survey method: Surveys align the needs of customers with the goods and services that companies provide They serve different purposes for the company and the customer, so cach has incentive to ercate or participate in the suey experience Surveys are beneficial for customers in that they give them an outlet to praise

good service or air grievances Customers can have an impact on company procedure —

or at least, they can feel like they’re making a difference In this way, companies can

form an emotional connection with their customers, build customer loyalty, and gain insights thal will help thern to betler provide what cusLomers want Tr this survey, T want

1o find out the purposes when companies use VIC Pay services, the satisfactions and the

complains from their end users and how about their risk management

® Contents of investigation: Application and deployment situation of online

payment services at businesses that are VIC Pay’s customers; quality of online payment

services that VIC Pay is providing and feed back from customers when using online payment servies on their website

* Low to proceed: ‘The questionmaires after being designed will be sent to customers’ businesses under the imlroduciion from VTC Pay Businesses, alber

answering the questionnaires, will return them and be gathered and put into the database

25

of SPSS software for processing and analysis ‘he purpose of applying this method is to help gather information in the fastest, most economical way and handle it in the most

accurate way so that it can give the most accurate assessments and results

Advantages and disadvantages of this investigation:

c Advantages: fast, convoniont and highly efficient

© Disadvantages: businesses may not respond or provide correct answers

* Sample objects: Customers of VTC Pay

© Tourism businesses: 25 questionnaires

o E-commerce businesses; 5 questiormaires

© Nưmberofsurveys

© Number of surveys given: 30 questionnaires

© Number of surveys response: 25 questionnaires

© Number of valid surveys: 20 questionnaires

- Expert interview:

Interview content: Viewpoints of VIC Pay on the situation of domestic

and foreign online payment market; assess the model of online payment service provider

that VIC Pay is implementing; VIC Pay's current service quality, VIC Pay's development orientation Besides, from the interviews, finding out some development

solutions for intemal services and how to manage risks from VIC Pay’s services

` How to investigate: Direct interview at the company

e — Sulyecis of the study: Experts are invited to interview directly at the

enterprise, including the direclor, sales manager, in charge of security and

confidentiality, in charge of marketing

© —_ Advantages and disadvantages of the investigation method:

© Advantages: Being in real contact with managers should visually observe

altitudes and ways when responding (o interviews to asscas the authenticity of”

information; Obtain subjective comments from enterprises on industry issues,

26

© Disadvantages: It is difficult to get an overview and objective assessments about the market, the business model of the company

Methods af investigating secandary data:

- Report of business activities results of VTC Pay

© Content: As the result of synthesis report on the status of business activities

in the 2 years 2017 and 2018 of VIC Pay

» Advantages and disadvantages: The statistics on businesses give us a

visual view of business performance of businesses

- Other sources:

© Secondary data is cxploited from sources such as E-Commerce Repolt over the years by the Department of 1/-Commerce - Ministry of Industry and ‘Irade,

seminars and forums on electronic payment, newspapers in the country and

internationally and from Intemet source about the development of e-payment in Vietnam

and around the world

® Content: is information on general development of online payment in the

word and Vielnam, evaluate, evaluate and forecas| the development speed in the coming time of Online Payment and E-Commerce

© Advantages and disadvantages: Quick, easy scarch, diverse dala Tlowever, the accuracy and updating of the data is difficult to verify

21.2 Method of processing data

- Quantitative method SPSS is software that provides data management and statistical analysis systems

in a graphical cnvironment, using descriptive menus and simple dialogs tp perform most statistical analysis data for users Users ean easily use SPSS for regression analysis, frequency statistics, graph construction

Methods of synthesizing and analyzing data by average value: The results of the collected questionnaires are synthesized on SPSS and analyzed by average and

statistical indicators ‘The statistics from the company’s performance are handled by two detailed analytical methods and illustrated charts

- Qualitative method

Analyze and evaluate information through interview questions Interview questions were built from general industry to intensive companies Methods of general analysis in the form of inductive, assessing different issues and then synthesizing and making general and specific judgments

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CHAPTER 3: ANALYSIS ABOUT THE DEVELOPEMNT OF ONLINE PAYMENT SERVICES

OF VTC PAY AND PROPOSE THE SOLUTIONS TO DEVELOP ONLINE PAYMENT SERVICES FOR

TOURISM BUSINESSES AT VTC PAY

3.1, Gencral assessment

In the world, c-commerce websites have the ability to pay online by credit cards

very popular In Vietnam - with the habit of using cash with restrictions on legal

corridors, lechnalogy, supporl from banks, the concept of online payment is still quite

strange to almost people

With a population of 97 million people (July, 2019), of which 65% of the

population is young (under 30) and the number of Vietnamese people using the Intemet

is nearly 30 million people but cash is still a payment instrument with a large proportion

in business and account for the majority in the payment transactions of residential areas

‘This statement is reflected in the actual payment survey in 2018, the results show that in more than 165,000 Vietnamese enterprises in the North, Central and South, the using cash in payment is as follows:

Privaic businesses with morc than 500 workers have about 73% of their

transactions condueted through the banking system,

© Businesses with fewer (an 25 workers, the proporlion was 47%

© Most foreign businesses only have more than 90% of transactions done through banks

» — Most stale-owned enterprises and privale businesses usc 70% of (heir

progress to pay wages

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© 82% of household businesses still pay cash for their goods or commodities

° 72% of private business households pay taxes in cash,

These figures show that changes in payment activities in Vietnam seem to have

not caught up with the rapid fluctuations of the whole economy in general and of the

banking system in particular

From just about 135,000 accounts in 2000, by the end of 2004 it had increased

almost 10 times to 1,297,000 accounts and in 2007 it was over 7 million accounts and

by the end of 2018 there were more than 45 million accounts according to Mr Pham

Tien Dung — Director General of Payment Department — State Bank of Vietnam The

average annual growth rate is from 130% -150% on account numbers Currently, inter-

bank electronic payment system has been established, connecting 63 branches in

provinces and cities From there are just over 11,000 ATMs (Automatic Teller Machines)

and about 37,000 POS (Point of Sale) in 2010, by the second quarter of 2019, the number

of ATM and POS according to the state bank's statistics is as follows:

Table 1: The number of ATM and POS by the second quarter of 2019

Transaction value Termninal No of devices No of transactions

Graph 1: The development of ATM and POS by the second quarter of 2019

From this table and chart, we can see that after nearly 10 years, the number of

ATMs in 2019 increased to 170% compared to 2010 and the number of POS machines

increased more than 7 times Besides, the using ATM for make payment is more popular than using POS

3.2 Actual situation

According to information at the Annual Meeting of the Bank Card Association

Vietnam 2018, the transactions via ATM are still mainly cash withdraw transactions,

accounting for 86.81% of local card usage, cash withdrawal/ATM/year turnover still

increased over the year (from 60 billion in 2012 to 128 billion VND in 2018), which

shows that people’s cash habits are still very popular

‘Most online shoppers still choose to pay cash when receiving goods with 91% of respondents saying they use this method, followed by 48% using bank transfer, 20% of

respondents said they used each type of payment cards

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Graph 2: The development among types of payment

Chart Title

3.3 The factors affecting the provision of electronic payment services

in Vietnam

3.3.1 The competitive environment in the country and abroad

Evaluating domestic and foreign competitive environment helps enterprises get

an overview of the market situation in the world and Vietnam in the field of online

payment Enterprises must know the level of development in the world at what level and where the domestic level is, inferior to the general level of the world to be able to make accurate decisions Since then, enterprises can know which types of products and

services are popular in the world, what types of products are suitable for Vietnam's

market to provide such information services At the same time, enterprises need to grasp

the competitive trends in the international card market, market shares of big companies

such as Visa, MasterCard, JCB, Amex in order to take alliance steps to cooperate with

card organizations Internationally, not only learning experience, but also transferring

technology, shortening the time for researching and developing online payment products

and services in the country

3.3.2 The habit of using cash

The percentage of units receiving salaries from the State budget to pay salaries

via bank accounts is 45% but in fact there are many accounts where the balance of time exists on the account is only calculated by the hour not only by their need to withdraw money to spend but still have the mentality "to leave money in bank accounts is not

reassuring” Not many people believe that, having to keep money in hand is their own

money, but not in the account do not know how

Graph 3: The percentages among each types of payment methods

Payment Methods

In shopping, too, the majority of buyers and sellers are still familiar with the

method of "no money, no talk", because consumers are worried that when buying

products online, they may buy unused products or substances The amount is not as good

as expected or even not receiving goods even though the money has been transferred,

while Vietnam's law on consumer protection is not really effective This habit, coupled

with the psychological fear of publicizing income, is hindering and limiting the

development of trade finance in Vietnam

3.3.3 The safety issues when using online payment

Some customers when using online payment system fear about the level of privacy of personal information Maybe it's because the WEE system or payment system

1s broken On the other hand, it may be duc tơ:

» Lackers infiltrate

* Identity theft

» Exploiting technical flaws

* Denial of service attacks

» Viruses and malicious codes

» Exploiting operation crrors

» Attack the application

» Others

‘thus their personal information will be taken advantage of by others, may use up

all their money in their account or a more dangerous thing is Lo use if for illegal purposes

It is for some reasons that some people are very afraid to use this system compared to using cash

Therefore, the government and some businesses are gradually overcoming these

disadvantages so that customers can be more secure when making transactions

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Graph 4: The rate of using security measures in enterprise

“The rate of using security measures in enterprises

3.34, The factors related to telecommunications network infrastructure

Factors related to telecommunications network infrastructure affect online

payment service provision activities such as:

Speed of ADSL services development: The development of ADSL services will

create a highly competitive environment, low prices and improved quality, allowing

users to access broadband and cost reasonable

International internet connection capacity: Every country when connected to the

Internet must go through international connection stations, and the capacity of these

cable lines allows international outbound connections to be implemented quickly or slowly

Speed of VNIX national intemet transit system: Like international internet connection, national internet transit systems also play an important role, affecting the

quality of online payment transactions on the internet in particular, e-commerce

transactions and internet access in general

3.3.5 The factors related to legal infrastructure

The elements of legal infrastructure for e-commerce in general and online

payment in particular are legal framework, oriented nature, helping enterprises apply and

deploy online payment into operation H-commerce activities legally, having fair and healthy competition in the market Legal infrastructure characteristics affect online

payment service provision

Goverment orientation on developing online payment such as building a master

plan for non-cash economic development and e-commerce development plan through

stages

Speed of promulgating policies and legal documents, decrees, circulars guiding

the implemenlalion of laws related lo e-payment and adjusting aspects related 10 e- commerce such as the Law on Delivery Electronic translation, Commercial law,

Customs law, Intellectual Property law, Information technology law

Policies to supporl and encourage e-commerce enterprises in gonieral and online

payment in particular on the basis of international cooperation and technology transfer

3.4 ‘Types of online payment service products on the market for the

1ourism industry

3.41 Online payment solution for service providers who want to authenticate and collect money right through the business website systen

Provide online payment solutions for businesses that want to authenticate and

collect money immediately from custamers through the website system Customer

amoney deducted and transferred to the account of tourism busimesses al a bank

Customers can use international and domestic credit / debit cards to make online

paymonis, The number of acceptable cards depends on the connection program of the

service provider

342 Online payment solutions for businesses without websites

Provides a tool that allows travel businesses to create manual orders and then

create links to send customers to make a payment process ‘his service applies to tourism

‘businesses that are unable to build a website with full functions such as building tour,

payment and sceurity

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3.43 Solution of infrastructure spstem for issuing prepaid cards

Provide infrastructure system to issue prepaid cards suchas gift cards, travel cards

For cardholders, the solution allows online consumers or other c-commerce channels

Prepaid cards allow the subject to own and use the card, including those under the age

of 18 Prepaid cards can be combined with debit and credit cards to avoid most card

payment risks

3.5 Evaluate the situation and impacts of business envirunment factors on VTC Pay's service provision for tourism businesses

3.5.1 Introduction about VTC Pay

a History of formation and development

VIC Pay is a part of VIC Technology and Digital Content Company (VTC

Intecom) VIC Intecom is a unit subsidiary of Vietnam Multimedia Corporation (VIC),

has officially run since January 2006 By having a youth generation in human resource

with full motivation and creativity, VIC Lntecom is one of top I'T business strengthening Digital Content Industry, joining a winning in Master Plan by Government “Vietnam is

a strom nation for TT and Communication

VTC Intecom was established in January 2016 and VTC Pay officially went into

operation in January 2009, has 10 years of operating and business experience in the field

of digital content and clectranic paymont

C Pay has obtained the following licenses and certificates:

Fed, 2009: License No31/GP-NUNN for providing payment intermediate services from State Bank of Vietnam

2015: Received PCLDSS International Security Certificate

Jan, 2016: Awarded the prestigious quality products and services voted

‘by consumers in 2015

VTC Pay was born in the context, when o-vommerce in Vicinam is developing

strongly but the online payment platform las not developed in accordance with the speed