Besides banks and e-wallets, the payment market will soon welcome another formidable competitor, Mobile Money. However, Nguyen Tri Hieu, a banking expert, said that the payment field was not easy to enter because the profit margin from this field was very low, especially in the first stage, it required huge promotions to create payment habit of the users.
Facing the increasingly fierce competition, how is the division in this market?
With more and more intermediaries participating, payment market share will surely be redistributed. I think that basically, banks have many advantages so they maintain a good payment market share. Besides, e-wallets have entered this market for a while and also expanded the presence in the payment market quite well.
But in the future, when Mobile Money is active, they have the opportunity to grow faster than e-wallets. Because customers who want to use e-wallets still have to open an account at a bank to transfer money from the account to the e-wallet. Meanwhile, for Mobile Money, users only need to have a mobile phone to transfer money to each other or to pay for services. While the population that does not have a bank account is still quite large, Mobile Money can exploit this customer segment well. Maybe the market welcomes this product positively, but to create a habit for users that takes time and costs, the payment market share for Mobile Money is still limited. However, in the future, this is a strong competitor for banks, especially for e-wallets.
There is an opinion that we are too careful to prepare for Mobile Money, do you think so?
I do not think so. Because in a number of large countries, even the United States, they do not encourage the use of this product by telecommunications companies because it can affect monetary policy, money supply. In Vietnam, because many people do not have a bank account, especially in remote areas, Mobile Money is encouraged to develop. But because of the large number of users, Mobile Money operation also carries a certain risk.
So, what solutions to control risks to Mobile Money’s activities?
I think firstly, to control the cash flow into Mobile Money. What a number of people are concerned about is that the network may use that money to invest in risky activities that users cannot control. If that is the case, do not exclude the case that users of this service lose money. Therefore, it is necessary to have control measures to ensure safety for Mobile Money users. The second issue needs to control the flow of money in and out of Mobile Money so that it does not affect the money supply and regulate monetary policy in general. Another point to note is the prevention of money laundering. Previously the scratch card of the network has also been used for gambling purposes. Not excluded, Mobile Money is the new target of this crime to use the money to illegally trade.
What will payment service providers have to do to keep and expand market share, sir?
For banks, network expansion is very important to increase the opportunity to promote products and services to gain market share. At the same time, it is necessary to improve the quality of services and reduce fees to encourage more users. Especially, the security issue continues to be further strengthened to consolidate trust for customers. For e-wallets and Mobile Money to expand market share, they have to promote their products better and should target customers in remote areas. Another factor that makes the payment competitiveness for the payment is the price. For the Vietnamese market, the issue of price is extremely important, if the cost that customers have to spend when using e-wallet or Mobile Money is high, it is certainly not well received by the market. So the first time they accept sacrificing profits set reasonable service prices to bring their products deeper into the payment market.
The competition of e-wallets and the coming of Mobile Money may affect the payment market share of banks. But as analysed above, the bank will still be the main component in the payment market because besides prestige, diverse products, especially the security in payment activities are invested by banks thoroughly and under the strict control of the State Bank of Vietnam (SBV), the reliability in banking services is quite great. I think, at least in the next three to five years, banks will still hold the majority of payment market share.
