Mobile money: moving closer to official deployment

May 18, 2020 | 08:02
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After years of delay, mobile money – a technology that allows people to receive, store, and spend money using a mobile phone – is highly likely to be pressed into service from the middle of this year in Vietnam, entailing the opportunities to promote non-cash payment among the more than 50 per cent Vietnamese population who are unbanked.
mobile money moving closer to official deployment
Mobile money aims to promote non-cash payment and the development of diverse economic sectors in Vietnam

According to Minister of Information and Communications Nguyen Manh Hung, despite being somewhat late, the new service would get the green light for deployment from next month (June) and telecom service providers who get the go-ahead need to carefully prepare both their plans and associated material bases to ensure fast implementation.

Hung noted that the prime minister has approved the deployment of the new service on a national scale, instead of only “in some specific areas” as proposed earlier.

Hung lifted the veil on the fresh mobile money deployment plan in Vietnam at a recent Ministry of Information and Communications meeting.

The telecom sector’s leading players – VNPT, Viettel, and MobiFone – submitted dossiers for mobile money trial implementation last year, of whom state-owned telecom group VNPT and military-run Viettel are expected to be the first ones to be greenlit.

Right after learning that authorised management agencies might grant licenses for the implementation of mobile money services from next month, Nguyen Son Hai, deputy general director of VNPT told VIR, “It only takes one month for us to roll out the service in the market after getting the license. VNPT will unfold the service to our 100,000 selling points nationwide, promoting cashless payment among subscribers leveraging e-commerce advantages.”

He added that Vietnam has enormous advantages for mobile money deployment as mobile phone subscriber density has reached 100 per cent of the population, despite still a high rate of unbanked population.

Vietnam has enormous advantages for mobile money deployment as mobile phone subscriber density has reached 100 per cent of the population.

VNPT’s big advantage in the race for mobile money service provision among other heavyweight competitors lies in its own ecosystem of digital finance. Along with this, VNPTPay encompasses nearly 50,000 points of sale (POS) across the country.

The group has also completed the full technology suit necessary to build up an inclusive service ecosystem, including Vietnam education network (VnEdu), hospital management software service (VNPT HIS), one-stop gate software VNPT-iGate, and more.

Simultaneously, VNPT is deploying Mobile Connect, a secure universal identity service that also allows non-cash payment of public services, as well as deploying Payment Connect, a public service payment portal that aims to provide an intermediary payment platform helping to connect the national public service portal and diverse payment channels such as banks and payment intermediaries.

VNPT has already got the license for intermediary payment service provision. Besides VNPT, Viettel has also acquired a similar license.

In addition to drawing up plans for mobile money deployment, Viettel has also established Viettel Digital Services Corporation (Viettel Digital) to prepare for service launch.

“After our scheme gets the go-ahead, we will quickly make revisions if necessary and launch the service. Notably, not only smartphones using 3G and 4G, even common handsets using 2G will be able to deploy mobile money service,” said Viettel Digital CEO Pham Trung Kien.

Nguyen Thanh Nam, Viettel Group deputy general director, unveiled that the group has been in full throttle for the new service launching right after getting the license.

Accordingly, the group has developed the necessary infrastructure for service provision from rural to urban areas as well as established its own digital ecosystem. Last November, Viettel Pay joined hands with VNPay, a leading player in this field, to push up cashless payments across Vietnam.

Through the co-operative deal, Viettel Pay’s network has increased to more than 50,000 POS and 200,000 transaction points across the country.

According to a report of BIDV Training and Research Institute, mobile money was present in 90 countries with nearly 870 million registered accounts, 272 apps, and a daily transaction revenue averaging $1.3 billion.

Vietnam had around 129.5 million mobile subscribers, around half using 3G and 4G, while 43.7 million or 45 per cent of the country’s population use smartphones, the report cited SBV figures released in last November.

The Vietnamese government targeted to reduce the ratio of cash payments to less than 10 per cent by the end of this year, from 11.3 per cent in 2019.

By Tuan Thuy

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