Through Vietnam’s Payment for Forest Environmental Services (PFES) system, designed with USAID support, downstream forest service users, including hydropower companies, pay upstream communities for protecting watersheds so that those companies have stable water supply to produce electricity. Since PFES was first piloted in 2008, it has generated approximately $600 million, and payments to rural forest owners have been primarily made in cash. Over the past two years, USAID’s Vietnam Forests and Deltas (VFD) program worked with ViettelPay and Vietnam’s Forest Protection and Development Fund to introduce e-payments via mobile phones to rural communities for protecting forests.

Payments transferred via mobile phones are quicker and more efficient, and recipients can then easily pay for goods at shops, or transfer money to family or friends. E-payment also shows increased benefits during the COVID-19 pandemic by reducing direct contact between people and thus the risk of transferring the virus. Last month, VFD and the Lam Dong provincial forest fund introduced a communications campaign to showcase the benefits of e-payments to forest owners who are now using ViettelPay for the first time and provided guidance to more than 60 community members in four districts on how to coach others in their communities to use e-payments. USAID support has helped expand e-payment services to 3,600 households in rural communities and is expected to reach approximately 500,000 households across Vietnam.

So What? The PFES system’s digital finance platform increases transparency, security, and efficiency, while limiting direct person-to-person contact and reducing the risk of spreading COVID-19.