As a type of application in the field of financial technology (fintech), electronic wallet (e-wallet) is being used in Vietnam for cashless payment for daily expenses, or monthly transactions such as electricity, water, telephone charges, Internet, subscription television, etc.
Vietnam e-wallet market is in the early stage of development with more than 20 service providers but the total number of registered accounts is only about 20 million.
According to information from the State Bank of Vietnam (SBV), by the end of 2018, there were only 4.2 million out of a total of more than 20 million registered accounts linked to bank accounts. Experts said that this ratio was low because users still kept their consumption habits of cash payment.
Payment by e-wallet is now most commonly used in the payment of electricity, water, and telephone charges, Internet, subscription television. Currently in Vietnam, most major e-commerce sites have also linked to e-wallet payment channels. In total, there are more than 10,000 locations across the country accepting e-wallet payments.
The most headache problem of operating organisations is how to stimulate about 16 million remaining e-wallet accounts linked to bank accounts, by donating gift packages worth 300,000 dong to over 500,000 dong per account to boost demand.
In addition, Nguyen Thuy Duong, expert of Ernst & Young Vietnam Limited, said that the average cost of banks to collect information on a bank account is about 300,000 dong, excluding the storage and management costs incurred over time.
At that cost, if organisations carry out the verification of e-wallet account information for 4.2 million wallets linked to bank accounts, the total cost was 1.26 trillion dong. And for more than 20 million registered accounts, the cost would be more than four times higher.
But the problem is that a mobile phone number is required for each e-wallet registration. The e-wallet account, when linked to the bank account, will continue to be verified. The phone number used by the two parties must match.
According to Nguyen Thuy Duong, it is only necessary to have a mechanism to connect, share and use user information, which will decrease costs for businesses and inconvenience for users.
The general principle of mobile application development is simple to operate, easy to access and use. Thus, the application can spread widely. If payment by e-wallet is complicated, users will hesitate to use it, which will not stimulate cashless payment.
In 2018, with 4.2 million e-wallets linked to bank accounts, the whole banking system handled 214 million transactions with a value of 91 trillion dong, down 4.5 percent compared to 2017. If e-wallet is subject to additional cumbersome and troublesome constraints, it is likely that the number and value of electronic transactions will be hard to increase.
