According to Nguyen Tri Hieu, when going into operation, Mobile Money would be easier to use and more convenient than e-wallets, which could easily lead to competition between mobile money and other electronic wallets.
On May 30, in Resolution No. 84 on the tasks and solutions to continue removing difficulties for production and business, promoting disbursement of public investment capital and ensuring social order and safety in the context of the Covid-19 epidemic. One of the solutions requested by the prime minister was to grant pilot licenses following the prime minister’s Decision on approving the pilot deployment of payment by telecommunications accounts for small-value goods and services (Mobile Money).
In his recent speech on promoting e-government, deputy prime minister Vu Duc Dam also noted that the crucial point was to accelerate electronic payment and deploy it quickly so that people could pay by their mobile.
The Ministry of Information and Communications said that by June 2020, Mobile Money would be deployed. The Ministry of Information and Communications recommended that enterprises carefully prepared schemes and facilities for quick deployment when licensed to provide this service.
Before Mobile Money was deployed, there had been some opinions expressed concerns about the existence, development, and competition of Mobile money with more than 20 types of electronic wallets currently available on the market.
Expressing views on this issue, Nguyen Tri Hieu, a financial expert, said that Mobile Money would be easier to use and more convenient than electronic wallets, which could easily lead to competition between mobile money and other electronic wallets.
The expert explained, inherently mobile money was also a form similar to electronic wallets. Mobile money was an excellent way to help people without a bank account, could open small mobile accounts from which to pay instead of cash. That was a positive side, but how to manage it?
Hieu analysed, the government had approved in principle for the three largest telecommunications companies in Vietnam, including Viettel, MobiFone and VinaPhone, to launch Mobile Money. These carriers would accept money from customers, then open an account for customers on mobile accounts. The amount that customers deposited into that account for use and payment was similar to an electronic wallet. However, with Mobile Money, there was a difference.
Hieu mentioned an example. When using an electronic wallet, customers who wanted to put money into an electronic wallet must use their bank account, i.e., they had to transfer money from their bank account to their electronic wallet to use for payment. With mobile money, customers could shorten one step. Instead of having to use your bank account and transfer money from your bank account to the electronic wallet, when using Mobile money, customers would only need to deposit their cash directly into one of the three carriers so they could open accounts for payment without the banking system.
According to Hieu, the deployment of mobile money would be especially useful in remote areas, where people had neither an account nor banking service. That was also the government’s desire to move towards a non-cash economy gradually.
However, experts believed that, despite many advantages, the deployment of mobile money in Vietnam still had many potential risks and challenges.
Firstly, telecom companies need to be controlled when receiving money from customers. These companies were required to commit to using the money sent by their customers only for payment but for their investment purposes.
Although the amount spent on mobile money could be small, it could be several tens of millions maximum for one person. But if many people participated in this programme, the amount could become massive. Therefore, regulators should make sure that the money put into mobile money was not used for all other purposes, Hieu said.
Secondly, although the amount of money each citizen put into their mobile money might be very small or extremely small, it did not exclude the possibility of money laundering activities. That money could be transferred into mobile money through many accounts splitting up. When that money was in the operator’s account, the user of that money could buy, sell, and do any transactions without going through the control of the authorities, so that was the risk.
Thirdly, there was a risk of monetary policy. Possibly, the mobile money programme might give businesses, particularly the big telecommunications companies, the function of making money. It meant when people put money in them, they could release one new type of money, which was mobile money. This mobile money, based solely on people’s contributions, might not affect the money supply. However, if not properly controlled, those telecommunications companies could issue money for themselves or other economic sectors, and the money that went into circulation would become the supply of money. That money supply would affect the M1, M2, M3 money supply of the monetary and financial system. Therefore, there would be an impact of mobile money on monetary policy.
Currently, the State Bank of Vietnam (SBV) had the function of money supply and management. However, in the case of the network to make money, who would manage? Without a mechanism to manage this, it would change the money supply across the country, Hieu emphasized. Also, according to Hieu, up to then, there had not been any specific regulation, while SBV could not manage telecom companies but only banks and financial institutions.
On the other hand, if not assigned to SBV but assigned to the Ministry of Finance or a monetary security agency to manage these companies, how would their coordination with SBV work due to the relation with the national budget.
Lessons learned a few years ago showed that many people could take advantage of loopholes to gamble with phone scratch cards. Mobile money was the same thing without management.
Therefore, Hieu affirmed that with the distinctive feature of high-tech products, provided primarily through the network operators, the monitoring and management of mobile money also required close cooperation between relevant agencies, such as SBV, Ministry of Information Communications, Ministry of Public Security, etc. Management and security plans should also be formulated appropriately to deal with information technology crimes or other objects.
On the other hand, the development agent network also had potential risks of awareness, incurring illegal charges from customer deposits, withdrawals, or even impersonating suppliers to cheat deceiving depositors. The regulators also need to continue to improve the legal environment for mobile money.
Finally, Nguyen Tri Hieu recommended that when deploying mobile money, it was necessary to identify and authenticate customers to avoid fraudulent transactions.
