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The State Bank of Vietnam has granted Vietnam’s largest mobile operator a licence to pilot mobile money service
Last week, MobiFone became the first Vietnamese mobile operator to launch mobile money services, with Vietnam Posts and Telecommunications Group (VNPT) hot on their heels. At the time, Vietnam’s largest operator, Viettel, was notably silent on the mobile money front, but today they too have announced they will begin offering these services to customers.
According to sources, the slight delay to Viettel receiving the licence was merely due to delays in processing the application.
As a result of the licencing, from today Viettel customers will be able to use their mobile subscription as a bank account, buying and selling low-value goods and services, as well as directly withdrawing, depositing, and transferring funds.
For many years now, Viettel has dominated the Vietnamese mobile market, currently having over 65 million subscribers and market share greater than 50%. The operator also has the largest coverage in the region, with its 2G, 3G, and 4G networks reportedly extending across 99% of the country. As such, this leaves them very well positioned to make the most of mobile financial services, with the operator expecting a major uptake of the new services, especially in remote and rural areas where traditional financial services are unavailable.
Indeed, the availability of Viettel’s mobile network far exceeds that of the nation’s banks, with some predicting that widespread and rapid uptake of Vietnam’s burgeoning mobile money services could put pressure on banks.
For Pham Trung Kien, CEO of Viettel Digital, however, mobile money does not necessarily pose a threat to the nation’s banks and may, in fact, boost citizens’ engagement with financial institutions once they realise how convenient cashless payment is.
“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 use of bank accounts when they are familiar with electronic payment methods," said Pham.
Recent data from Omdia suggests that this trend towards a cashless society is already accelerating in Vietnam, with payment card market penetration set to increase to almost 50% by 2025.
Exactly how the mobile money services of MobiFone, VNPT, and Viettel ultimately stack up against one another remains to be seen, but it is clear that this could offer significant boost for the national economy.
“This promotes e-commerce, agricultural commodity exchanges, especially in remote areas, promotes online public services, Fintech companies, innovative startups, and economic growth. In all countries that allow Mobile Money, this service generates economic growth of up to 0.5%,” said Information and Communications Minister Nguyen Manh Hung.
In related news, Viettel also announced last month that it had signed a Memorandum of Understanding with the city of Da Nang to turn the city into a ‘smart city’ by 2025. The first steps of the plan include the deployment of a 5G network at Da Nang Software Park No 1 and No 2, as well as the construction of a IT Complex Centre within the city.
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