Amidst all the talk of electronic payments, cash still rules.

During my recent trip to Vietnam, the importance of cash was reiterated, digital platform are still not close to reaching cash’s biggest strength, easy of acceptability and interoperability.

The first thing I had to do before traveling was buy USD, upon landing in the country I paid the visa fee in cash and that was the starting point to a 10 day cash life.

From taking an Uber to ordering food, to accommodation it was all cash. My biggest incentive for not using a card was avoidance of FX fee. Since FX rate is known only post the transaction.

Also what I observed was, most businesses preferred cash over card a known behaviour across most geographies.

From India’s perspective most tourist I meet here prefer cash, for the above reasons and there is no viable global option.

A thought I had

Probably networks like Mastercard and Visa need to create products along with banks, where a user can create a virtual currency account linked to their existing credit/debit card, users can transfer money, in this case INR to VND and while in the visiting country all spends in VND are deducted from the virtual account, upon return the balance can be transferred back to the home country currency.

A question some might ask is, the user would still need to pay FX fee, certainly but the fee would be known to the user at the time of conversion, which is unknown while making an cross-currency transaction.

Another question, how is this different from forex card, in principle it is similar to a forex card but the customer has to carry only his primary credit/ debit card and not multiple cards. 

Countries which are looking to reduce the cash economy for anti-money laundering, counterfeit currency, tax evasion or for cash handling reasons, there efforts are futile, if visiting tourist continue to provide fuel to the cash economy.

#Mastercard #Visa #Vietnam #Cash