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Mobile Money: Opportunities and Challenges for Vietnam

Nguyen Manh Hung
Image credit: Ministry of Information and Communications

The Minister of Information and Communication (MIC), Nguyen Manh Hung, recently said Vietnam once had the opportunity to become one of the first countries to employ mobile money in payment, but it was missed because of slow licensing.

Speaking at a banking conference held earlier this month, the Minister stated that mobile money would be a solution that helps accelerate non-cash payment.

According to a press release, in Vietnam, the proportion of credit card users remains modest, but the mobile subscriber density is 100%. More than 90% of the transactions, worth less than VN 100,000 (about US $), are made in cash. In this environment, mobile money could be a strong solution to accelerate non-cash payment.

2020 will be the year of digital transformation, the release claimed with comprehensive growth. Some business sectors will be prioritised to be transformed first and the banking sector is one of them.

The story here is, the Minister explained, that technology can solve many of the country’s problems. However, Vietnam needs to renovate, dare to renovate, and accept renovations.

Many people, especially the poor and communities in rural and remote areas, are left out of the formal financial system. This means that they cannot access official banking services. Mobile money is a potential remedy.

Mobile money enables people to access services and pay bills through online platforms, such as healthcare, education, finance, and social security. For instance, in Kenya, after three years of mobile money deployment, the proportion of use of banking services increased by 19%.

Mobile money would lead to the creation of businesses in the fields of digital economy and technology start-ups. It could be the most popular payment method, accepted by start-ups. In fact, the Ministry expects the technology to contribute to the explosion of start-ups in Vietnam.

Mobile money, with small transaction values, turns people into bank clients, not bank competition.

An industry analyst said that people and businesses are looking forward to getting licenses to try mobile money. The State Bank of Vietnam and MIC will have to make greater effort to pave the way to get licenses for trial in early 2020.

OpenGov earlier reported that the MIC is expected to announce the country’s national strategy on digital transformation for the year.

The Prime Minister had called for greater efforts from businesses to pave the way for digital transformation in media and publication sectors, especially to create services for other enterprises.

He asked MIC to make a breakthrough in e-government in 2020, promoting connectivity and data sharing among ministries, sectors, and localities.

An electronic mart will be available in every household and a widespread postal system will ensure the flow of e-commerce. 5G trials are set to be commercialised in 2020.

Along these lines, the Deputy Prime Minister recently ordered that all documents sent and received on the national electronic document exchange platform must be digitally signed and authenticated as per a circular on the use of digital signatures in government agencies.

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