Mobile money: opportunities and challenges for Vietnam
The government decree on non-cash payment, once promulgated, will pave the way for mobile money to develop in Vietnam.
Minister of Information and Communication Nguyen Manh Hung at a banking conference held in early January said Vietnam once had the opportunity to become one of the first countries applying mobile money in payment, but it missed the opportunity because of slow licensing.
Minister of Information and Communication Nguyen Manh Hung
Hung stressed that Mobile Money would be a solution that helps accelerate non-cash payment. Mobile Money will train people and turn them into banks’ clients. Therefore, there is no need for banks to feel worried about the development of Mobile Money.
In Vietnam, the proportion of credit card users remains modest, but the mobile subscriber density is 100 percent. More than 90 percent of the transactions worth less than VND100,000 are made in cash. In such conditions, Mobile Money would be a strong solution to accelerate non-cash payment.
“The story here is that technology can solve many problems of the country. However, we need to renovate, dare to renovate and accept renovations,” Hung said.
According to Hung, many people, especially the poor and people in rural and remote areas, are left out of the formal finance system, i.e they cannot access official banking services. Mobile Money is the solution for these people access services and pay fee on internet platform, such as healthcare, education, finance and social security.
|Mobile Money would lead to the birth of businesses in the field of digital economy and technology startups. Mobile Money will be the most popular payment method, accepted by startups, especially innovative startups.|
Mobile Money would lead to the birth of businesses in the field of digital economy and technology startups. Mobile Money will be the most popular payment method, accepted by startups, especially innovative startups.
“We expect Mobile Money to contribute to the explosion of startups in Vietnam,” Hung said.
Mobile Money will also enhance the access to financial services.
In Kenya, after three years of Mobile Money deployment, the proportion of use odbanking services increased by 19 percent.
Mobile Money, with small transaction value, turns people into bank clients, is not a rival of banks.
An analyst said that people and businesses are looking forward to getting licenses to try Mobile Money. The State Bank of Vietnam and Ministry of Information and Communication will have to make greater effort to pave the way for Mobile Money to get licenses for trial in early 2020.
2020 will be the year of digital transformation, which aims for a digital country. This is a comprehensive transformation. Some business sectors will be prioritized to be transformed first, including the banking sector.
More and more players have joined the e-wallet sector, but all of them understand that they cannot expect big profits at this moment.
While non-cash payments are admittedly on the rise, the cash payment habit and limited development of technology infrastructure are big problems for the country’s non-cash economy, experts have said.