The market’s growth slowed to 11% in 2020 from last year’s 35.3% surge.

Reduced consumer spending resulting from the pandemic has impacted Vietnam’s card payments market growth, slowing to an 11% expansion in 2020 compared to the 35.3% growth in the previous year, according to analytics and data company GlobalData.

The value is expected to increase at a compound annual growth rate (CAGR) of 20.9% between 2020 and 2024 to reach US$61.8b (VND1,432.2t) in 2024.

“The COVID-19 pandemic has affected consumers’ buying capacity, forcing them to cut-down on non-essential purchases, which impacted card payments growth in the short-run,” noted Nikhil Reddy, banking and payments analyst at GlobalData.

Following the surge in COVID-19 cases, Vietnam declared a nationwide lockdown beginning 1 April 2020. The large-scale social restrictions imposed across several regions resulted in the closure of businesses and brought the domestic and international travel to a complete halt. This resulted in reduced consumer spending and, in turn, the slower growth of card payments.

On a more positive note, the gradual reopening of businesses and easing of lockdown restrictions will provide the much-needed push to the country’s economy, which will positively impact the payment industry, according to Reddy.

In addition, with Vietnam being one of the few countries that has been able to control the outbreak to a certain extent—recording less number of cases and low death toll—its economy is expected to still grow in 2020 despite global headwinds. World Bank forecasts the country’s GDP to register 2.8% growth in 2020, then jump to 6.8% in 2021

“Vietnam’s card payments market witnessed robust growth during the past few years supported by rising financial inclusion and improvement in payment infrastructure. Whilst the growth has been halted by COVID-19 this year, the easing of lockdown restrictions will increase consumer and commercial spending, which in turn will push card payments in the country,” Reddy concluded.