Mobile Money will be the driving force for the digital economy

Mobile Money will promote cashless payments and create a strong impetus for Vietnam’s digital economy and digital society.
According to the International Data Group (IDG), by the end of 2019, only nearly 40% of the Vietnamese population had a bank account. Of these, still up to 80% of daily user spending is done by cash. Statistics also show that 98% of Vietnamese people use cash when paying for items under VND 100,000 and nearly 85% of transactions at ATMs are cash withdrawals. These are the barriers if Vietnam wants to promote the development of the digital economy.

Mobile Money serves up to 90% of small transactions Faced with this shortcoming, the Ministry of Information and Communications believes that Mobile Money will be an effective solution to add to the means of payment for Vietnamese people. If Mobile Money service is licensed to telecommunications companies, the coverage of e-payment services will quickly reach 100% of the population. This will promote e-commerce, agricultural commodity exchanges, especially in remote areas, promote online public services, promote Fintech companies, innovative startups, help economic growth. All countries that allow Mobile Money generate economic growth of up to 0.5%. According to calculations by major service providers, Mobile Money will probably serve up to 90% of small transactions. This is an opportunity for telecommunications companies to promote digital transformation of customers. Because, users can easily buy online goods services as well as digital content services in the telecommunications company’s ecosystem. On the contrary, this is also the driving force for telecommunications companies to digitally transform. This will bring great benefits to society to move towards a digital economy and digital society in the future. Commenting on this issue, Mr. Vu Hoang Lien, Chairman of Vietnam Internet Association, said that Mobile Money service will bring many benefits to consumers and society and promote non-cash payments. However, the Mobile Money service will also impact payment intermediary service providers as the service will share the market, customers and business algorithms. However, with the trend of technology, we need to further improve the payment environment to be a driving force for development. “If licensed soon, Mobile Money will be the Government’s first sandbox to create breakthroughs and create strong momentum for new technologies and new services to be introduced to society. If we look at the services If new services bring benefits to the people and the country, it will be very easy to put these sandboxes as a driving force for development. Whether the policy admits new things and new components to the market or does it still keep its own territory for the old ones Sandbox will create a breakthrough legal environment that dares to accept change, accept new things create new vitality of society in the trend of digital transformation,” said Mr. Vu Hoang Lien. Mobile Money: an opportunity for telecom companies The Chairman of Vietnam Internet Association emphasized that the opportunity for telecommunications companies for Mobile Money service is very clear when they have a customer base because most Vietnamese people use mobile phones. The telecommunications company’s services are also the foundation for connecting many essential services of society, so it will open up great opportunities for the development of Mobile Money services. Three major service providers, Viettel, VNPT, and MobiFone have also applied for permission to provide this service. In this race, the company that solves the management problem to bring benefits to customers will prevail. From Mr. Lien’s point of view, Viettel is slightly better than other service providers because of its large customer base and good management. However, telecommunications companies can take advantage of their strengths to attract customers, so this will be a hot market in the near future. Currently, the Government has agreed to test the Mobile Money service for 2 years, but service providers are still waiting for a license. Commenting on this delay, Mr. Mai Liem Truc, former Deputy Minister of Transport and Communications (now the Ministry of Information and Communications) said that Mobile Money was delayed by about 2 years. If this service is licensed early, it will bring many benefits to society and the economy. Mr. Truc also emphasized, Sandbox is the direction for the Government to vigorously test new technology services that bring benefits to the people and the country. “Sandbox” is a pilot institutional framework, allowing a small number of businesses, to test new technologies and new business models in a practical environment but with a defined scope and time, under the supervision of regulators and have appropriate hedging plans in place to prevent the consequences of failure without having a major impact on the national financial system. Following the government’s direction, the State Bank is currently building regulatory sandboxes for financial and banking services based on information technology, including Mobile Money.