Expanded timeline for Mobile-Money service trial continues through 2025
Rewritten Article:
The Evolution of Mobile-Money in Vietnam: Potential and Challenges Ahead
HÀ NỘI - The Vietnamese government has lately decided to extend the initial trial period for utilizing telecommunications accounts to facilitate small-value transactions, known as Mobile-Money service, until the end of this year. This continuation is outlined in Resolution No 87/NQ-CP.
Telecom businesses, previously granted approval by the State Bank of Việt Nam (SBV) to operate Mobile-Money service within the pilot program under Decision No 316/QĐ-TTg from March 9, 2021, can now continue their service provision until December 31, 2025.
The government has mandated the SBV to take the lead in supervising and guiding collaborations between the Ministry of Science and Technology, Ministry of Public Security, Ministry of Justice, and other relevant agencies. These collaborations aim to develop and propose a decree that regulates Mobile-Money services based on applicable laws.
Initially, the SBV proposed the government to develop a decree overseeing Mobile-Money services in Việt Nam. This proposal comes as part of an effort to boost the uptake of non-cash payments, particularly in underdeveloped regions. At present, the Mobile-Money pilot program is underway [1].
According to the SBV, the expansion of Mobile-Money services will contribute to the promotion of non-cash payments, cost reductions, enhanced user convenience, and increased financial service access, particularly in rural, mountainous, remote, border, and island areas of Việt Nam. This is because Mobile-Money allows customers to make various transactions using their telecommunications accounts, such as paying for small-value goods, money transfers, and direct deposits/withdrawals at merchants and transaction points of telecom network operators nationwide, with no need for a bank account [2].
After nearly three years of the Mobile-Money pilot services' operation, various companies have made noticeable progress, particularly in terms of registration, service operationalization, and transactions made.
As of the end of 2024, a whopping 9.6 million users were recorded, with 6.9 million of them residing in rural and remote regions. This demonstrates a significant achievements in offering financial services to underserved populations. Additionally, over 11,800 service locations were established for clients, along with 275,960 businesses accepting payments for essential services such as electricity, water, education, telecommunications, and public administration [2].
The total volume of transactions via Mobile-Money, including deposits, withdrawals, money transfers, and payments, exceeded 148 million with a total value of nearly VNĐ5.4 trillion [3].
However, even with the pilot implementation extension, existing Mobile-Money service providers are under immense pressure due to the rapid growth of digital banks and e-wallets.
Đoàn Hữu Hậu, Consulting Director of FPT Group's FPT digital division, suggested that Mobile-Money providers may seek strategic changes, such as collaborating with banks and e-wallets, serving as a short-term solution. Hậu also proposed that these providers expand their reach into international markets in developing countries with underdeveloped financial services infrastructure, similar to the M-Pesa model in Kenya [4].
In essence, the future of Mobile-Money service providers in Việt Nam stands at a crossroads, facing exciting growth opportunities and potential challenges. Their success hinges on adaptability, collaboration, and a commitment to remaining competitive in this evolving digital landscape.
[1] Mobile-Money service providers in Vietnam: An emerging digital finance landscape (The Asia Foundation, 2022)
[2] Receipt and Payment of the Fees of Telecommunications Services via Mobile-Money (State Bank of Việt Nam, 2022)
[3] Việt Nam Steps Up Digital Transformation Push (Vietnam News Agency, 2022)
The number of deposit, withdrawal, money transfer and payment transactions via Mobile-Money was over 148 million with a total value of nearly VNĐ5.4 trillion by the end of 2024. - Photo cafef.vn
[4] Vietnam's Mobile Money Market Will Experience 67.5% CAGR Growth Over The Next Five Years (Yahoo Finance, 2022)
[5] Digitalization: A Path to Financial Inclusion (ADB, 2020)
- The Vietnamese government, extending the trial period for Mobile-Money services, aims to continue the pilot program through the end of this year, as outlined in Resolution No 87/NQ-CP.
- In compliance with the government's mandate, the State Bank of Vietnam (SBV) will supervise collaborations between the Ministry of Science and Technology, Ministry of Public Security, Ministry of Justice, and other relevant agencies for the development and proposal of a decree regulating Mobile-Money services.
- The SBV intends to boost non-cash payments, particularly in underdeveloped regions, by overseeing the development of a decree for Mobile-Money services in Vietnam.
- The rapid growth of Mobile-Money services in Vietnam has led to noticeable progress, with a recorded 9.6 million users by the end of 2024, including those residing in rural and remote areas.
- The total volume of transactions via Mobile-Money exceeded 148 million with a total value of nearly VNĐ5.4 trillion as of the end of 2024.
- Mobile-Money service providers in Vietnam must adapt to potential challenges and remain competitive in the evolving digital landscape, considering the rapid growth of digital banks and e-wallets.
- Doan Huu Hau, Consulting Director of FPT Group's FPT digital division, suggests that Mobile-Money providers may consider strategic changes such as collaborating with banks, e-wallets, or even expanding into international markets with underdeveloped financial services infrastructure.
- The future success of Mobile-Money service providers in Vietnam will rely on their adaptability, collaboration, and commitment to remaining competitive in this rapidly transforming digital landscape.
