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Mobile Money Picks Up Speed in Vietnam

State-run organisation Viettel and two other mobile operators, VNPT and MobiFone, have applied for approval to implement their own mobile money pilot projects. These projects will allow the use of mobile phone credit to pay for small-value goods and services. The implementation of mobile money is expected to promote the non-cash payment ecosystem and convenience in financial transactions, especially for those in rural areas.

The Ministry of Information and Communications (MIC), the Ministry of Public Security (MPS), and the State Bank of Vietnam (SBV) had worked together to assess the projects. The application dossiers for licences have been sent back to the firms for improvement, in accordance with the Prime Minister’s Decision regarding the pilot run of the services, according to the Deputy Governor of SBV, Nguyen Kim Anh. The Decision states that firms operating the services must apply artificial intelligence (AI) and big data at points of sale to verify users, as well as devise mechanisms to keep watch on the cash transactions and ensure accurate amounts.

SBV noted that upon the completion of procedures, the providers will be allowed to pilot the services for two years. Approval of the project aims to bolster cashless payments via mobile devices as well as access to and use of financial services, particularly in rural and remote areas, to capitalise on the country’s telecommunications infrastructure and network.

The credit limit will be no more than VND10 million (US$435) per month for all transactions on each account. Vietnam has around 129.5 million mobile subscriptions, half of which use 3G and 4G, and 43.7 million, or 45% of the population, use smartphones. According to the Global System for Mobile Communications Association (GSMA), mobile money currently covers 290 different types of transactions in 95 countries worldwide with 1.04 billion registered accounts. Mobile Money transfer agents worldwide are seven times more common than ATMs and 20 times more than bank branches.

In March, the Prime Minister agreed to implement mobile money services on a trial basis. The time for trying the service is two years from the date it was licensed. To register mobile money services, clients need to show ID cards/passports with the information coinciding with the information in their registered mobile phone subscription and get identified by licensed service providers.

As OpenGov Asia had reported, over 50% of the Vietnamese population still do not have bank accounts. Many people are excluded from the formal financial system, especially the poor in rural areas and people in remote areas. Mobile money can help them access paid services on the Internet, including healthcare, education, finance, jobs, and social security. Mobile money is expected to penetrate the rural market and digitise the agricultural value. In developing countries, about 15% of adults have revenue from selling farm produce, but they receive cash, which is a risky, ineffective, and inconvenient payment method.

Mobile money will provide the clients who don’t have bank accounts with one more transaction channel. This will help increase the non-cash payment ratio as requested by the government. Thanks to mobile money, citizens in rural parts of the country will have the chance to experience convenient shopping with fast and accurate payments, suitable for small transactions

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