The State Bank of Vietnam is completing a mobile money pilot project and will submit it to the government for approval this month, Governor Le Minh Hung has said.
The pilot project will allow mobile subscribers to use their telecommunication accounts to pay for goods and services up to a limited value.
Telecommunications providers like VNPT, Viettel and MobiFone will join in the payment market.
Mobile money, which can easily reach people living in remote areas without banks as most people now own smartphones, is expected to help move Vietnam from cash to cashless payments.
At the same time, banks will not have to spend money to expand their networks, according to the central bank.
To promote the development of mobile money, it was necessary to develop a good security mechanism, the central bank said. In addition, it also required cooperation from telecommunications providers and efforts to upgrade technology infrastructure.
Prime minister Nguyen Xuan Phuc approved the use of mobile phone accounts to pay for goods and services in January 2019.
The government has been pushing mobile money as a solution to fight the COVID-19 pandemic.
According to the Global System for Mobile Communications Association (GSMA), a mobile money service includes transferring money and making and receiving payments using a mobile phone.
The GSMA’s report released in March highlighted that mobile money accounts now exceed one billion worldwide. The industry processed $2 billion in transactions per day in 2019.
The association’s statistics also revealed that the reach of mobile money agents was now seven times that of ATMs and 20 times that of bank branches.
According to a report of the BIDV Training and Research Institute, mobile money has huge potential for development in Vietnam.
The report pointed out that at the end of 2019, Vietnam had 129.5 million mobile subscribers, of which nearly half were 3G and 4G. Vietnam also had 43.7 million smartphone users, or 45 per cent of the country’s population in 2019, together with 68.5 million internet users.
In addition, the central bank’s statistics showed about 63 per cent of people from the age of 15 or higher were unbanked and could be target customers of mobile money.
The report also pointed out that Vietnam needed to improve the legal framework for mobile money.
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