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Vietnam to Pilot Mobile Money Services for Two Years

Vietnam will pilot Mobile Money service across the country for two years before officially launching it, according to Deputy Governor of the State Bank, Dao Minh Tu. The development of services using mobile phone credit to pay for small-value goods and services is expected to promote financial inclusion and non-cash payments in Vietnam, especially amid the complicated developments of the COVID-19 pandemic.

According to a news report, currently, in Vietnam, there are nearly 125 million mobile phone subscribers, while the proportion of adults with bank accounts is only 64%. Mobile Money is expected to make a drastic change in the payment of essential services. The State Bank claimed that the payment method will be especially helpful in remote areas, where people do not have bank accounts or access to modern payment services.

This service will help expand more non-cash payment channels, especially in the context of COVID-19. The Vietnamese military-run group Viettel, the Vietnam Post and Telecommunications Group (VNPT), and the MobiFone Telecommunications Corporation (MobiFone) have registered to pilot the payment service. Tu said that the joint management of the Ministry of Public Security, the Ministry of Information and Communications (MIC), and the State Bank in this scheme will help ensure safety for users. Deputy General Director of VNPT noted that the government’s permission to pilot Mobile Money service will bring great benefits to the national economy and provide more electronic payment tools for people. This is a foundation towards developing a digital economy and digital society in the future, he added. The Deputy General Director of Viettel Digital Services Corporation noted that the organisation has prepared technological infrastructure and human resources to pilot Mobile Money as soon as it is licensed.

Vietnam is witnessing an increase in demand for online and mobile banking services from consumers, which is driving the digital transformation of banks. Online transactions in Vietnam for the first four months of this year jumped 66% compared with the same period last year, which has been accelerated enormously by the pandemic. There’s also been a huge increase in the use of e-wallets, payments via smartphones and QR codes, and high demand for ‘instant credit’ solutions such as buy-now-pay-later, particularly among those segments of the population that remain unbanked or underbanked. Vietnam’s consumers are demanding digital financial solutions, and the industry is rising to the challenge by using cutting-edge digital banking solutions, gaining attention around the world.

Furthermore, the adoption of digital banking in Asia-Pacific (APAC) emerging markets, especially Vietnam, has caught up with developed markets. The behaviour change has brought the financial services industry new prospects. The window for seizing opportunities will narrow quickly as consumers give serious consideration to innovative propositions from digital banks. The increase in active digital bank users is arguably higher in Vietnam compared with APAC’s emerging markets and some APAC-developed markets. Between 2017 and 2021, 88% of APAC consumers in emerging markets actively use digital banks, a 33 percentage points increase. In Vietnam, the numbers rose by 41 percentage points to 82% in 2021. At the same time, fintech and e-wallet penetration reached 56% in 2021 for Vietnam, a hike of 40 percentage points from 2017. This penetration level is higher than the average of APAC emerging markets (at 54%) and developed markets (43%).

 

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