Opening way for digital payments

Fourteen domestic and international banks use OpenWay’s WAY4 platform

As new technologies roll out in the financial and banking sector utilising fintech, cloud computing, big data, and the Internet of Things, banks are adjusting their course towards digital banking and non-cash payments.

The Payment Summit 2019, themed “Building a digital payment ecosystem” and organised by the Vietnam Banks Association and OpenWay Group, drew the participation of hundreds of experts on October 16.

At the event, Pham Tien Dung, director general of the Payment System Department at the State Bank of Vietnam (SBV), confirmed that the non-cash payment ecosystem has already drawn great demand to cover diverse payment needs.

“At present, we are no longer bothered by bill collectors who used to knock on our doors while we were having dinner with our family. In addition to bills, we can pay for a lot of different costs via phone apps like internet, cable TV subscription, tuition fees, and shopping,” said Dung.

In 2017, as much as 87.57 per cent of total power revenue was conducted via banks or e-wallet apps. Over the past years, banking services have become popular. As of August 2019, the number of individual bank accounts has increased to 83.9 million from 69 million in 2017 and 60.2 million in 2015, while the proportion of adults holding a bank account rose to 63.7 per cent in 2018, from 52 per cent in 2015.

In public services, digital payment is also growing stronger with the participation of 50 banks. As of now, 95 per cent of total customs revenue flows in via bank transfer, while 99 per cent of businesses register to pay taxes online. To date, there are 32 units licensed by the SBV, 28 of which provide payment portal services and 29 of which provide e-wallet services. “Money transfers via mobile banking have already surpassed automated teller machines,” Dung said.

In fact, the number of internet and mobile banking transactions was 204 and 170 million in the second quarter of this year, rising by 60.6 and 109.5 per cent, respectively, over the same period last year, and the value of transactions also increased remarkably.

“Mobile payment is a trend that supports new technologies like QR codes, near field communication, tokenisation, and biometric authentication,” added Dung.

However, the proportion of cash payments against total payments in Vietnam is still 11 per cent, although the government set the goal of reducing this figure to 10 per cent by 2020 and 8 per cent by 2025. In order to reach the target, it is necessary to synchronise payment options and units providing goods and services, as well as improve the IT system of banks.

Talking to VIR, Maria Vinogradova, OpenWay Group director of strategy and market intelligence, said that preparation between banks should be improved. “We can see some e-wallet projects here, but every company is trying to launch their own mobile applications and their own e-wallet solution,” she said. “In other regions, several banks use the same wallet platform to operate on, which is more efficient and more people start using them because they can be integrated into a lot of ­mobile phone applications. It is better to have one or two apps that are available everywhere.”

As the highest-ranked digital payment processing software by Gartner since 2009 and the leader in digital wallet software by Ovum since 2016, OpenWay is the top choice for banks and financial organisations to provide card and digital payment solutions.

The WAY4 application developed by OpenWay – a single platform to launch classic and highly innovative payment services alike – has been applied by 135 banks, financial organisations, payment intermediaries, switching companies, and telecoms groups across the globe.

In Vietnam, 14 banks and financial organisations have already set up WAY4, including Military Bank, MSB (the former Maritime Bank), ACB, VP Bank, SeAbank, Lotte Finance Vietnam, and ACS Vietnam from AEON.

“The digital payment ecosystem based on modern software for card and other payments enables customers to make transactions in half a minute. Most important is that the digital payment ecosystem optimises the experience for customers and enables them to change their payment behaviour,” said Nguyen Manh Ha, OpenWay Vietnam’s country director.

A representative of MSB, which has been using OpenWay for nearly a decade, said that it has been the best platform on the market since they adopted it.

“We chose the solutions of OpenWay for their high flexibility and customisability. The platform is easy to use and develop in the long term, and outshines other platforms used by other banks,” the MSB representative told VIR. “Moreover, with a team of local and overseas experts, OpenWay has been able to provide great support for MSB in the process of digital transformation.”

As Industry 4.0 unfolds and new technology permeates the economy, banks and businesses are hard-pressed to choose optimal solutions for their digital transformation, catching up with consumption trends and pioneering the segment.