Known as mobile money, it is by nature a form of electronic money or an electronic wallet without the need to be linked with a bank account. With the service, mobile phone users can use their mobile accounts to transfer money or pay for goods and services. As a result, it allows all people to access official non-cash payment methods, thereby accelerating economic digitalisation.
Currently, about 90 countries have developed mobile phone-based payment platforms with a total user base of 900 million, accounting for one fifth of the global population. The total daily transaction volume by mobile money is estimated at US$1.3 billion, with an annual growth rate of 20%.
Meanwhile in Vietnam, 99% of transactions under VND100,000 (US$4.3) are still conducted in cash. Therefore, mobile money is expected to strongly boost non-cash payments in the country as the rate of mobile phone subscriptions among the population has already exceeded 100% for many years.
Furthermore, as a large part of the population have not yet been covered by formal financial services, especially poor rural residents and those in remote and mountainous regions, mobile money will provide them with a convenient non-cash payment method. They can use their phone to pay electricity and water bills or even buy groceries at a local market without space and time limitations. That is why this service is anticipated to help change the widespread habit of using cash for almost everything.
Economist Can Van Luc stated that telecommunication service providers will play a crucial role in mobile payment development, as evidenced by the popularisation of microfinance services by mobile carriers in some countries.
Despite being a latecomer, Vietnam can learn from the experience of pioneering countries to quickly roll out the service. But it also comes with significant challenges, especially with regards to information security, unregulated SIM cards, money laundering and illegal international money transfer. Therefore, regularly updating and enhancing security and safety measures is a requirement for such payment services.
For now, all three major carriers in Vietnam, namely VNPT, MobiFone and Viettel, stand ready to provide mobile money services. VNPT Chairman Pham Duc Long stated that mobile money is a common global trend and a new solution to enable digital transformation. He added that VNPT is fully prepared to provide mobile money services as soon as it receives the green light.
MobiFone said it is also ready to roll out the service at tens of thousands of outlets throughout the country to support its customers, but noted that it first needs to review its subscribers’ information to ensure such information is accurate.
Under regulations drafted by the Ministry of Information and Communications, mobile phone users must provide accurate personal information if they want to use mobile money services and, though a user can possess multiple SIM cards, they can use only one mobile money account.
