At the workshop on mobile money to promote financial inclusion held in late May, Minister of Information and Communication Nguyen Manh Hung expressed his keen interest to have mobile money implemented in Vietnam this year.
Acting as an e-wallet service, mobile money allows users to load, send, receive and pay for small-value transactions through both smartphones and basic feature phones.
The minister thus hoped that Vietnam would become the 91st market in the world to roll out its mobile money platform, ensuring formal financial services to reach every corner of the nation and each of the residents has access to the basic payment service.
At the regular government press conference held in May, State Bank of Vietnam deputy governor Nguyen Thi Hong also noted that the central bank has in April worked with the to study and submit a report to the Prime Minister on the piloting scheme to implement mobile money.
Nguyen Trung Kien, representative of Vietnam’s largest mobile network operator Viettel Group, said that in order to offer mobile money service in Vietnam, telecommunication companies must satisfy a number of requirements including acquiring the payment intermediary services license, having the capability to verify identity of customers and sufficient financial resource to back their payment services investment.
A proper and clear legal framework to govern the operation of mobile money service is also required to ensure the smooth progress of its implementation and function once put into practice.
In addition, a limit for mobile money transaction must also be determined, either on a daily or monthly basic, by each of the mobile network operators before the service is piloted to ensure safety and minimise the risk of fraud.
Vietnam may well see its mobile money scheme flourish, replicating the success of Sub-Saharan Africa where mobile money has driven financial inclusion throughout the region.
According to the World Bank, while the share of adults with a financial institution account remained flat, the share with a mobile money account almost doubled, to 21 per cent, in 2017.
Since 2014, mobile money accounts have spread from East Africa to West Africa and beyond.
Vietnam, meanwhile, has only 30 per cent of the adult population having bank accounts and 64 per cent of the population is living in rural and remote area. The country, however, has some 143 million mobile connections with 72 per cent using smartphones in 2018. All of these are said to be the right ingredients to promote mobile money service in the country
According to Standard Chartered’s report entitled ‘Cash digitisation in ASEAN’, the region’s digital economy currently generates approximately $150 billion in annual revenue and is expected to become one of the world’s top-five digital economies by 2025. Its internet penetration rate is 58 per cent, of which more than 90 per cent of access comes through mobile devices. This trend thus underscores the increasing competition from mobile wallets to replace traditional payments methods in the region.
With the network infrastructure that spans across countries, telecommunications companies, according to Standard Chartered, play a more active role in reaching the unbanked and those located in remote areas. Their network helps support the launch of their e-wallets to provide the unbanked population with access to basic financial services. Their services began with a simple feature of allowing members to top up their e-wallets for the purpose of transferring funds to other members.