According to a press statement released by the Ministry of Information and Communications (MIC), with a large number of users, Vietnamese mobile network operators are tapping into the financial service market, a major field of fintech.
Mobile network operators now have unprecedented opportunities to provide financial services. People can use mobile phone accounts to transfer money and make payments for small-value goods. A service will be provided by mobile network operators shortly, called Mobile Money.
The release said that money transfers and payments for goods and services can also be implemented with e-wallets. However, there is a crucial difference between e-wallets and Mobile Money. E-wallet users have to link their bank accounts to register an account. With Mobile Money, a customer only needs to link their phone number.
The director of the Telecommunication Agency, Nguyen Duc Trung, said the transactions of this kind are only provided to those who still don’t have bank accounts. The transactions are made via mobile devices and nearly all traditional services are available, from money transfer and payments to cash stores.
The concept of mobile money has been introduced to the public, but it is not new. The model is popular in countries with less developed financial infrastructure, high population, low income, and demand for remitting money to home villages.
According to the MIC, about 90 countries in the world run Mobile Money with 866 million accounts, 272 businesses, valued at US $1.3 billion each day.
In Vietnam, the number of Mobile Money accounts in 2018 increased by 20%, while the average transaction value was US $200 a month per account.
Management agencies expect the service to enable more people to access official financial transactions as a result of its large coverage. The service will also be useful to people who cannot meet the requirements to open bank accounts.
Currently, only 40% of Vietnamese citizens have bank accounts. However, there are 130 million mobile subscribers.
According to the Director of the Payment Department of the State Bank, Vietnam still doesn’t have a legal framework on this, while issues related to transaction authentication and security risks need to be clarified.
Analysts say that Mobile Money is the perfect opportunity for telecom service providers to jump into the payment service sector and other related “gold mines”.
In the past, mobile network operators once provided financial transactions via SMS, but the service still required a link with a bank account.
Apart from Mobile Money, network operators are developing e-wallets. Viettel has ViettelPay and VNPT has VNPT Pay.
Vietnam has been pushing for the digitalisation of all its sectors. OpenGov reported earlier that 55% of start-ups use digital technology to run businesses effectively, compared with 38% of businesses, helping them increase revenue by 34%.
According to a report, big data (58%), mobile technology (59%) personal cloud computing storage (53%) and public cloud computing storage (45%), application program interface (API), and embedded technology (40%) are the technologies mostly utilised by enterprises.
Digitalisation can be applied in all activities of businesses, which can be implemented in two steps: first, transform physical documents into digital-format ones and second, directly create digital documents, and completely remove the use of paper.