Online and mobile payments in Vietnam seem to have broken logjam in 2018 since their performance hitherto was rather low. That’s not to say that online transfers (not to mention the payments through MFS) are at the peak of inclusion, as the percentage of mobile financial inclusion still leaves much to be desired. Mobile financial services are just becoming a trend and there is something to be done in this respect to keep the ball rolling.
The state of financial inclusion in Vietnam
The population of Vietnam is about 97 million people with the larger half living in rural areas. 66% of the Vietnamese are Internet users and 64% take advantage of mobile Internet, Digital 2019 Vietnam reports. The level of financial inclusion is reported to be still rather low:
Another authoritative source, J.P. Morgan 2019 Global Payments Trends Report, highlights the low performance of both financial inclusion and mobile financial inclusion in Vietnam.
Vietnamese telecoms and banking industry
Mobile internet in the country is provided by the 3 largest telecom companies – Viettel, Mobifone, Vinaphone. Together they hold about 97% of a total mobile market share (Viettel 41%, Mobifone 34%, Vinaphone 22%), as reported by Mobile World Live.
The banking industry in Vietnam seems to be developed as well. This branch of the Vietnamese economy is represented by a large number of banks, 10 of which claim attention as being top 10 Vietnamese commercial banks:
But compared to the telecom companies, none of the banking players hold the largest share of the total market. Thus, for example, the top financial institutions like BIDV has a share of 22.2%, VietinBank – 20.5%, and Vietcombank – 14.4%, Intellasia.net reports.
What is preventing Vietnam from both general financial and mobile financial inclusion? How to expand the market share of a bank? How to reach as many clients as possible?
The answer to these questions is clear. It’s no accident that the largest Vietnamese telecoms have been mentioned above.
How to promote financial inclusion?
The bank is supposed, so to say, to outsource certain functions to telecom that is far more able to reach a greater number of clients due to its big customer base. Telecom is to assume the function of client acquisition, creating a simple and cheap client acquisition model, the thing the bank is difficult to cope with.
But how to make it happen? To do this collaboration mutually interesting and payable, a new go-between player is expected to get involved. It is a mobile financial service platform that is supposed to enable this interaction. Providing B2B, B2C, and P2P interactions, the digital wallet platform serves as a mediator between financial institutions, telecoms, merchants, as well as their individual clients.
The digital platform by Wallet Factory available on the market are not always able to integrate all the market players and to promote the whole process. There is an urgent need in a comprehensively integrated financial system, rather than just a mobile wallet.
Among available eWallet solutions, special attention should be paid to our wallet platform — the platform with proven experience. It is an all-in-one remedy. Digital platform is unique in offering both technical and business development solutions. After being implemented, it provides support for business development.
The digital wallet platform is based on a processing center for e-money, for any prepaid payment solutions. It is an engine enabling to make payments and transfers, make QR code payments, use mobile wallets and conduct transactions between them.
Banks are supposed to perform their traditional function — to manage credit and deposit transactions. Telecoms assume the function of client acquisition and provide the bank with a large loyal customer database. A telecom company provides access to an enormous aggregation of customers’ data that enables navigating a client to an appropriate product. With the full knowledge of its customers through tracking users’ activity on the Internet, telecom can provide a bank with a “hot” client, who is very much likely to purchase a product.