Cashless payment adoption in Vietnam’s informal family-operated businesses and traditional market enterprises

Abstract

The study investigates the use of cashless payment behaviors in informal family businesses and traditional market organizations in Vietnam. A quantitative approach is employed, utilizing structured survey data collected from 969 valid respondents, comprising small traders operating within informal and traditional market settings in Ho Chi Minh City. Structural Equation Modeling (SEM) analysis is conducted on the survey data using SmartPLS, with a specific focus on the relationships among traditional payment behaviors, government support, and cashless payment behaviors. The results indicate that consumers find it challenging to transition from cash payment behaviors to cashless transactions, primarily because they have been using cash for a long time. Additionally, government support plays a significant role in encouraging consumers to adopt digital payments. Sellers also desire to use non-cash methods. This will significantly influence their success, provided that regulations and infrastructure are favorable. The findings suggest that tax incentives, investments in infrastructure, and financial incentives can help facilitate a faster transition to cashless payments. The study supports the idea that small businesses can develop solutions through targeted marketing and support programs, thereby improving their transition into the Vietnamese digital market. It explores the unique challenges faced by small sellers, contributing to the limited research on adaptation to cashless payments in informal markets and developing countries. Additionally, the study highlights the crucial role of government in supporting the digital transition.