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Vietnam State Bank Approves Mobile Money Licenses

The country’s central bank received three applications for mobile money services and has licenced all of them, namely, Vietnam Post and Telecommunications Corporation (VNPT), MobiFone, and state-run group Viettel. Pham Tien Dung, the Deputy Governor of the State Bank of Vietnam (SBV), noted that SBV granted Viettel the mobile money service rights after VNPT announced it would pilot this service in Vietnam.

According to a press release, last January, the government urged the pilot use of telecommunications accounts to pay for services of small value and pilot new payment service models as management regulations are lacking. To promote Vietnam’s economy, the Minister of Information and Communications Nguyen Manh Hung made several recommendations, including piloting mobile money in the first quarter of 2020. He stated that if mobile money services are licensed to telecommunications operators, the coverage of e-payment services will quickly reach 100% of the population. This promotes e-commerce, agricultural commodity exchanges, especially in remote areas, promotes online public services, fintech companies, innovative start-ups, and economic growth. In all countries that allow mobile money, this service generates economic growth of up to 0.5%.

The CEO of Viettel Digital, Pham Trung Kien, noted that if the government allows mobile money to pay for services and goods of small value, the number of users of electronic payments will be large as the coverage of mobile networks is much wider than banks, even in remote areas where people do not have bank accounts. He explained that for small value goods, for example, a cup of iced tea, parking tickets, soap, or a pack of instant noodles, users will not use their bank accounts to pay but pay by phone. However, they will use electronic payments with bank accounts to buy motorbikes, houses, or goods of high value.

“Some studies estimate that in Vietnam, only about 30% of the adult population have a bank account, and when we create a habit of using electronic payments, the remaining 70% will be customers of banks. Thus, mobile money not only competes but also promotes the use of bank accounts when they are familiar with electronic payment methods,” said Kien. He added that the government’s policy of allowing pilot mobile money is the right trend. When implementing electronic payment services, people will see the practical value created by payment digitisation like saving time and costs.

Around 85% of Vietnamese banking consumers are more likely to use online and digital banking services compared to 18 months ago, according to a recent report. Globally, nearly two-thirds (61%) of consumers have made greater use of digital banking services over the last 18 months. Two in five (41%) have started using digital banking services for the very first time because of the COVID-19 pandemic. In Vietnam, these numbers are higher, at 70% and 54%, respectively. Approximately 90% of respondents use online and digital banking services mostly to pay bills, transfer money, and check account balances. 87% of local banking customers agreed with the importance of online and digital banking services in a bank or financial institution.

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