Vietnam’s nationwide cash payout: Police-run ID app at core of digital push, financial inclusion
Citizens will receive 100,000 dong each, primarily via bank accounts linked to national identification app VNeID
[HO CHI MINH CITY] The Vietnamese government is disbursing about 11 trillion dong (S$539 million) in state-funded cash gifts to all its citizens – over 106 million people – in celebration of the 80th anniversary of the country’s August Revolution and National Day.
Each citizen will receive 100,000 dong, either in cash or via electronic transfer through bank accounts linked to VNeID, the country’s official digital identification platform. The amount is sufficient to pay for two or three basic meals in Vietnam.
Operated by the Ministry of Public Security and integrated with the National Population Database, VNeID was widely adopted during the Covid-19 pandemic for health declarations. It later evolved into a platform for integrating identification data, personal records and facilitating access to public services.
Prime Minister Pham Minh Chinh, in a directive on Thursday (Aug 28), said the payout is to be implemented as soon as possible, before the country’s National Day on Sep 2.
Various local banks have since sent guidance to users on linking their bank accounts with VNeID to receive the government-disbursed social welfare funds.
There are about 26.8 million household heads in Vietnam, representing more than 106 million people.
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A report by the Police Department for Administrative Management of Social Order on Tuesday indicated that nearly three-quarters (73.6 per cent) of household heads have VNeID accounts that have undergone full identity verification, termed “Level 2”. The department is the body directly managing the ID system.
Separately, about 52 million bank accounts of citizens have been authenticated, the report noted.
Nguyen Son, vice-president at ABN Asia, a global software company with engineering hubs in Vietnam and Estonia, said that from the perspective of application development and user acquisition, the cash giveaway initiative is “seen as both strategic and highly effective”.
“The cost is relatively low, compared to the benefits it generates,” he added, pointing to VNeID’s increased reach and user trust across Vietnam.
Proven approach to accelerate digital transformation
Cash giveaways have long been adopted by both local governments and private firms globally.
Last September, the Thai government launched a Digital Wallet Scheme, which aimed to distribute about 450 billion baht (S$17.9 bilion) to 45 million Thai citizens aged 16 and above via Thang Rath, a digital wallet app developed by the government.
In 2023, various regions across China – including Shenzhen, Zhejiang and Nanjing – deployed digital-yuan voucher giveaways to boost adoption of the country’s central bank digital currency and encourage consumer spending during major events and holidays.
Nguyen The Vinh, co-founder and chief executive at Ho Chi Minh City-based blockchain firm Ninety Eight, likens the Vietnamese government’s initiative to “airdrop” campaigns commonly used by blockchain-related projects to distribute free tokens or digital assets to encourage adoption.
This approach is also widely employed by payment apps such as MoMo, Vietnam’s most popular e-wallet. Momo has in past years rolled out various cash incentives of 100,000 dong or more, to encourage users to link their bank accounts with the app.
“The database (gained through the government’s campaign) is an extremely valuable resource and advantage,” said Vinh, adding that VNeID could later become a “super app” capable of competing against various privately run digital platforms.
“Every form of power has a double-edged nature, but it is acceptable as long as it doesn’t hinder the private sector and ensures fair competition.”
As outlined in Vietnam’s National Data Strategy approved by Chinh in February 2024, the country recognises data as a new resource and breakthrough factor in national digital transformation.
The strategy highlights that a robust data ecosystem will not only unlock new opportunities for digital government, the digital economy and digital society, but also support economic restructuring – helping Vietnam achieve upper-middle-income status by 2030, and high-income status by 2045.
ABN Asia’s Son compared the Vietnamese government’s efforts to roll out a universal e-ID system and a nationwide data infrastructure to those of Estonia, a country widely recognised as a global leader in digital government.
In June, Chinh visited the northern European nation to explore its digital government model and its relevance to Vietnam.
Son said that VNeID, as a comprehensive digital record of citizens’ information, could provide a vital foundation for the government to advance broader goals, including financial inclusion, streamlining administrative procedures, as well as greater transparency in economic transactions.
“VNeID is positioned at the centre as a ‘super app’ for social management, in line with Vietnam’s vision of building a fully digital economy,” he noted.
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