HO CHI MINH CITY -- Once a rare sight in Vietnam due to the poor quality of its paper notes, vending machines are now sprouting up in this city thanks to the spread of smartphones that allows for easy digital payments.
Inside the lobby of Bitexco Financial Tower, a 68-story symbol of Ho Chi Minh City, stand five Kootoro vending machines, none of which take coins or paper money.
To make a purchase, consumers must download the Toro digital wallet app on their smartphones and register such information as name, address and phone number. The app will then convert money from a credit card or bank account into digital cash. Customers then use a password or fingerprint authentication to display a QR code that is scanned by a reader to complete the transaction.
These vending machines sell not only snacks but also lunches, pre-packaged dishes and desserts. Customers can even enjoy the age-old custom of drinking from a coconut in the heart of Vietnam's largest city thanks to this cutting-edge technology. Plastic-wrapped coconuts can be bought for the equivalent of 78 cents from these machines, which drill a straw hole just before dispensing to ensure freshness.
Kootoro has stepped up installation of vending machines in the city since last year as it aims for rapid expansion. "I don't carry my wallet during work, so they are really helpful," said a 25-year-old security guard who uses them every day.
The capital city of Hanoi also plans to introduce vending machines that accept cashless payments through smartphone QR codes this year.
Vending machines used to be rare in Vietnam due to a lack of reliable cash. Not only does the country have insufficient coins in circulation, but it stopped minting them in 2011. Paper currency smaller than 5,000 dong is severely worn, making it unfit for vending machine use. Operators find it cumbersome to refill change as well. Mobile payments, however, seem to have provided a quick solution to all these hurdles.
There are currently about 3,000 vending machines in Vietnam. That figure is expected to double next year and continue to sharply rise thereafter, an industry group estimates. As the country's burgeoning information technology industry grows and consumers become more accustomed to such innovations, Vietnam is likely to see new markets emerge in areas like the sharing economy.