Mastercard

The long-awaited implementation of mobile money is believed to enable banking-like solutions for those previously unbanked. Photo: Le Toan

Prime Minister Nguyen Xuan Phuc last week greenlit the two-year pilot application of mobile money, which allows the use of mobile phone accounts to pay for small-value goods and services. Following Decision No.316/QD-TTg, telecom service providers will have to build and send dossiers to the State Bank of Vietnam (SBV) for consideration and appraisal.

According to Nguyen Son Hai, deputy general director of state-owned telecom group VNPT, it is preparing technology, technical infrastructure, and its workforce to run mobile money services once it is approved to join the pilot programme.

“Besides experience in intermediary payment service provision, VNPT is equipped with the technology, connection infrastructure, security, and authentication technology equivalent to the banking system. We have teamed up with partners to offer internal training for staff. Thus, we can quickly deploy the new mobile money programme,” he added.

Compared with other competitors, VNPT has a competitive edge in the pilot programme due to its complete digital financial ecosystem. The VNPTPay e-wallet boasts nearly 50,000 points of sale across the country. In 2020, the e-wallet was integrated into the National Public Service Portal. It is one of the top online payment service providers through the portal.

The group has also completed the full technology suit necessary to build up an inclusive service ecosystem, including an education network (VnEdu), hospital management software service (VNPT HIS), one-stop gate software VNPT-iGate, and more.

Meanwhile, MobiFone officially received License No.09/GP-NHNN from the SBV for providing the intermediary payment service last week. This is deemed a necessary and sufficient condition for MobiFone to join the race for mobile money trial implementation.

Bui Son Nam, deputy general director of MobiFone, said that mobile money is the last piece of MobiFone’s digital ecosystem. Payment intermediaries and mobile money are important components in the overall strategy of MobiFone to accelerate digital transformation and expand business outside of telecommunications, as well as develop an e-commerce, payment, and finance ecosystem.

Nam further noted that MobiFone has ramped up its preparation for mobile money service provision early. MobiFone features a wide coverage of transaction points nationwide so the group can develop and diversify its structure of products, services, and customer base in the new field. MobiFone is ready to connect with transaction points accepting mobile money services.

New tipping point

Likewise, military-run Viettel Group has fully prepared to roll out the mobile money service after being greenlit. The group has built payment acceptance infrastructure and a service delivery system from urban to rural and remote areas. A practical digital ecosystem has also been formed, including digital payment and digital financial services, and e-commerce based on digital payments.

In particular, ViettelPay has over 100 features, serving as a solid foundation for Viettel to launch mobile money. ViettelPay now serves over 10 million customers, backed up by technology certificates and meeting international security standards.

Viettel expects that by 2025 it will boast 26 million subscribers using the mobile money service. Meanwhile, its revenue from the service is estimated to reach VND7-8 trillion ($305-350 million) per month by 2025.

Pham Trung Kien, CEO of Viettel Digital, expressed his optimism that mobile money adoption will be the tipping point for non-cash usage in Vietnam. “That means that overnight, any mobile phone users living in Vietnam has at their disposal the utilisation of contactless payment through mobile money services,” Kien said.

According to the SBV, Vietnam now has 89 million personal payment accounts, which means nearly 70 per cent of adults have bank accounts. However, the remaining 30 per cent have difficulties in accessing banking services.

Vietnamese regulators are trying to create an open and level playing field for mobile money and cashless payment services, which will allow both banks and non-bank providers to offer these services. The long-awaited implementation of mobile money is estimated to make non-cash payments accessible for more than 50 per cent of the underbanked and non-banked population in Vietnam.

Slow development

However, Marcin Miller, associate partner of consultancy McKinsey Vietnam, stated that mobile money is unlikely to generate a huge buzz in the e-payment landscape.

First and foremost, the success of mobile money has only occurred in certain geographical areas, mainly in Africa – for example in Kenya, where smartphone penetration is very low and people are still struggling in penetrating into a proper banking infrastructure.

“In Vietnam, the rate of smartphone usage in cities is 85 per cent, in rural areas 65 per cent. So when most people have access to e-wallets on mobile devices, why should they use mobile money?” he asked.

Secondly, Miller noted, the poor and underdeveloped banking infrastructure in Africa is the key silver lining in the function’s success on this continent.

However, even in rural areas of Vietnam, the coverage of bank branches is fairly good, which is in stark contrast to the situation in some African countries such as Kenya. Many more people can reach a bank branch easily, unlike people in rural Africa, with its own set of challenges.

Although Miller of McKinsey believed that mobile money will not make rapid changes or explosive growth in the e-payment landscape in Vietnam, this service will still lay the concrete foundation to bolster digital financial services in many areas of the market.

The BIDV Securities Company team emphasised that mobile money does not mean that banks or any payment intermediaries will lose their market share.

According to the latest regulations, businesses providing mobile money services are prohibited from performing traditional banking activities, such as lending and raising capital. At the same time, businesses are only allowed to provide mobile money services to transfer money and pay for legal goods and services in Vietnam, only for domestic transactions and not for any cross-border transactions.

“Mobile money is not a competitor to banks,” said Nguyen Dinh Thang, former chairman of the Board at LienVietPostBank.

In his perspective, banks may witness a downward trend of profit generated from payment of electricity and water bills.

“But instead, banks should focus on their major advantages which e-wallets or any payment intermediaries are not licensed, such as savings mobilisation, lending, and providing financial advices. The more people use mobile money, the greater cashless payment perception is enhanced,” Thang said.

On the other hand, Vietnam has been top among the most beneficiaries of remittances for the past few years. Recipients previously preferred receiving foreign currency in cash, but due to the COVID-19 crisis, they are encouraged to receive Vietnamese currency via bank accounts.

With the adoption of mobile money, market watchdogs expect that it will further facilitate international remittances in a safe and responsible manner, while reducing the risks of money laundering and terrorism financing.

Elsewhere, in Africa and other developing countries, traditional money transfer operators are also working with mobile money providers. Western Union has joined forces with Safaricom M-PESA in Kenya and PayMaya in the Philippines to provide cash transfer services through mobile. Bangladesh-based bKash mobile money is also collaborating with Mastercard to deliver remittance services.

Currently, Viettel Global – Viettel’s foreign subsidiary- operates in Cambodia, Laos, Timor Leste, Mozambique, Burundi, Haiti, Peru, Cameroon, Tanzania and Myanmar. It is predicted that Viettel’s new implementation of mobile money in Vietnam could further pave the way for its digital payment platform in Africa through mobile subscribers – a bid to compete with other international telecom giants.

While Vietnamese regulators have yet announced any international firms joining its mobile money programme, it could still eventually become a lucrative landscape for foreigners to latch onto.

26.5 per cent of businesses in Vietnam are owned by women

“When foreign-invested companies come to Vietnam, they prefer Vietnamese women for CEOs, not only in the technology industry but everywhere. They said Vietnamese women are resilient, warm, and committed,” Tieu Yen Trinh, CEO of Talentnet, said at the Empower Program’s launching day.

As the world of work is changing, women increasingly meet the demands of their jobs. Trinh said that the top 10 skills that people need for the working environment have changed a lot since the past. She said 60 per cent of the work is not EQ, relationship building, problem-solving, and people engagement.

If men tend to be ambitious and strong, always doing things with big views or visions, women have talent and competitive advantages in focusing on humans.

“I have had many chances to work with female CEOs. They focus a lot on the environment, bringing values and benefits for customers and the community. That is one of the competitive advantages for women to engage the community to run their own businesses,” Trinh added.

According to the latest Mastercard Index of Women Entrepreneurs 2020 (MIWE), 26.5 per cent of businesses in Vietnam are owned by women, ranking ninth out of 58 economies studied.

Additionally, the country stayed in the top 10 at ninth in Women’s Advancement Outcomes that evaluate both drivers and deterrents of women’s advancement in four indicators of Women Business Leaders, Women Professionals & Technical Workers, Women Entrepreneurial Activity Rate, and Women Labour Force Participation.

However, MIWE 2020 also revealed that Vietnam needs to do a great deal to support women entrepreneurs when the country was ranked 44th in Supporting Entrepreneurial Conditions.

To support women leaders to succeed in business, Trinh said that the most important thing for women to start is building a clear strategy. “It could account for 20 per cent of their success. Women face plenty of problems all the time, but if they plan well, things can go smoother,” she advised.

Chau Dang, CEO of Topica Native, stated that the most important thing for women leaders is to take care of themselves. “If you sacrifice yourself just to take care of family and other people without taking care of yourself, how will you survive to help them?” she asked.

However, it is easier for women in big cities to chase their careers than women in the highlands or remote areas with poor conditions.

Quynh Anh, CEO of Giga 1, commented, “While women are generally hard-working, disciplined, and intelligent, and are very careful – which are all good qualities to start a business –, they need more support from their family as well as from society, especially the startup society.”

The Empower Program was launched by Zone Startups Vietnam, in partnership with Sunwah Innovations & Swiss EP. The programme includes a 4-week free one-on-one accelerator programme that works with early-stage female tech entrepreneurs. It covers topics such as product development, marketing and communications, operations, leadership, and fundraising.

Most of large-sized banks have so far integrated payment methods via QR code (QR Pay) on mobile app to bring their products and services closer to customers as the mobile payment is forecast to continue booming in Vietnam in the time to come.

Statistics showed that the country’s online payments reached 110 million transactions last year, which pointed out very large confidence of customers in this payment method.

It is forecast that with the liberalization in policy, strong internal resources of businesses and the resonance of the entire society, mobile payment will continue booming in Vietnam.
The new, modern, convenient method of payment (QR Pay) has appeared and is gradually coming into life, suitable to the payment trend of countries in the region and the world.
With the supplementation of QR Pay feature, not only banks but businesses will be able to cut many kinds of fees, while limiting mistakes in payment and inventory. By doing so, businesses and banks can be interconnected, creating an ecosystem where customer is the focus.
From a customer perspective, the biggest benefit of QR Pay is the convenience, flexibility and ease. QR Pay simply includes a few basic steps: login to mobile app of banks, choose QR Pay function, use your phone to scan QR code of the shop, enter the amount and verify to complete the transaction.
In terms of security, the usage of QR Pay not only minimizes the stealing of information on credit card, or cash via two layers of security but is also convenient in installing.
Besides e-wallets of MoMo, Payoo, only after six months being put into operation, since September 2017, Samsung Pay received registrations of nearly 400,000 users, and 500,000 successful transactions, raising the total transaction value to VND350 billion.
So far, 15 banks and three card switching organizations have connected with Samsung Pay, accounting for 75 percent of the domestic card payment market.
Apart from Napas ATM card of such banks as Vietcombank, Vietinbank, BIDV, Sacombank, Shinhan Bank, ABBank, Agribank, Techcombank, TPBank, SeABank, Woori Bank Vietnam, there also have international cards such as Visa and Mastercard of Vietinbank, Citibank, Shinhan Bank, Sacombank, TP Bank, Maritime Bank, Saigon Commercial Bank (SCB), FE Credit.
Samsung has recently introduced new features allowing users to carry out mobile payments through manipulations with Gear S3 smart clock.
The government of Thailand has gradually taken strong measures to develop non-cash payment in the country. Currently, e-payment in Thailand (including mobile payment) is expected to increase from 68.2 billion Baht in 2015 to 143 billion Baht by 2020.
In Indonesia, the people ignore credit cards to shift to mobile payment. FT Confidential Research (FTCR) supposes that the widespread development of mobile payment is challenging the position of credit card in Southeast Asian region.
According to Visa’s survey in 2017, in terms of sales, the Asia-Pacific market has a value of nearly $11 trillion. Currently, more than half (55 percent) of transactions here are still being carried out by cash, which means that $6.1 trillion still has the potential of changing into electronic transactions.
Joe Cunningham, director of risk management for Visa Asia Pacific said apart from applying technology advancements to enhance payment experience for consumers, the issue of securing and ensuring transparency of payment system is the key for the development of commercial industry.
The rapid change of payment ecosystem requires new security measures not to affect the convenience of customers and sales units.

The handover ceremony of COVID-19 vaccines at the National Institute of Hygiene and Epidemiology in Hanoi

Addressing the handover ceremony of COVID-19 vaccines at the National Institute of Hygiene and Epidemiology in the afternoon of the same day, Deputy Prime Minister Vu Duc Dam expressed deep thanks for the great and valuable support from international organisations for the country’s fight against COVID-19.

Kamal Malhotra, United Nations Resident Coordinator in Vietnam, said that these vaccines will be a gamechanger and a critical new tool in the fight against the pandemic.

“Today marks a turning point – not just because we welcome 811,200 vaccines to Vietnam, the first in several anticipated deliveries of the COVAX-supplied vaccines to this country this year – but because it marks an incredible moment in history where a handful of countries, along with other actors, especially in the private sector, as well as UNICEF and WHO, have joined hands in solidarity, in recognition that vaccines are a public good which must be accessed equitably by both the richer and poorer countries alike and also by the poor and the most vulnerable individuals within the countries,” he noted.

An additional shipment of 3,364,800 doses is expected by the end of May, followed by more later in the year.

The vaccine containers touched down at Noi Bai International Airport in Hanoi

The vaccines in the cold storage of the National Institute of Hygiene and Epidemiology in Hanoi

If the world is to stem the spread of COVID-19 and urgently stop further dangerous variants from appearing, effective vaccines must reach 75 per cent of the world’s population. Beyond being an ambitious and essential goal that will allow economies to open and flourish, it is also an incredible moment in history, where the biggest and most complex vaccination campaign ever attempted is underway. Globally, more than 32 million doses of COVAX-supplied vaccines have been delivered to 63 countries in just one month.

Essential to the success of the campaign is vaccine equity, meaning every country and every person, including those hardest to reach, should benefit. To enable global equitable access to COVID-19 vaccines, especially to priority groups, the COVAX Facility, made up of GAVI, CEPI, WHO, and UNICEF – was formed. It is the only global initiative that is working with governments and manufacturers to ensure COVID-19 vaccines are available worldwide to both higher-income and lower-income countries.

While the arrival of vaccines through the COVAX Facility is welcome news, it will still be some time before a large proportion of the adult population is vaccinated. In the meantime, it is essential that people continue to follow government advice to wear masks, wash hands regularly, and maintain physical distance to reduce the risk of transmission.

At the handover event at the National Vaccine Stor age Facility in Hanoi, a series of governments were recognised and thanked for their generous financial contribution to the COVAX Facility for the provision and distribution of vaccines to 92 lower- and middle-income countries, free of charge.

Governments contributing in the spirit of vaccine equity: Australia, Austria, Belgium, Bhutan, Canada, Colombia, Denmark, Estonia, the European Commission, Finland, France, Germany, Greece, Iceland, Ireland, Italy, Japan, Kuwait, Luxemburg, Monaco, Netherlands, New Zealand, Norway, Qatar, Korea, Saudi Arabia, Singapore, Spain, Sweden, Switzerland, United Kingdom, and United States Private sector companies and foundations lauded for their contributions: Bill and Melinda Gates Foundation, Thristledown Foundation, Mastercard, TikTok, Shell, as well as individuals.

On the ground in each country, the WHO and UNICEF are actively supporting country health systems to plan and deploy, train health workers, improve their cold chain capacity, conduct monitoring, and raise public awareness and information on why vaccination is so important.

“The WHO joins the government of Vietnam and our partners in welcoming this milestone in the pandemic response,” said Dr Kidong Park, WHO Representative in Vietnam. “This achievement is a testament to global solidarity and what we can achieve together when many countries and partners work in unity to deliver a critical public health good. I commend Vietnam for the incredible work to facilitate the arrival of these vaccines from COVAX.”

“I would like to acknowledge the hard work of all the government counterparts involved, both from the health and non-health sectors,” he added. “I have seen how much you prepared for the arrival of these vaccines, from identifying priority groups, training health staff, facilitating delivery systems to reach the provinces, and keeping the public informed. The arrival of the vaccines means that more frontline workers and high-risk populations can be vaccinated and protected. WHO will continue to work alongside our counterparts to make sure these vaccines benefit whose who need them the most.”

Led by UNICEF, the procurement and delivery of this supply of the vaccines through the COVAX Facility underpins Vietnamese government’s Resolution No.21/NQ-CP dated February 26, 2021 on purchasing and using COVID-19 vaccines and will provide critical vaccination support for 20 per cent of the population.

UNICEF Representative Rana Flowers, in thanking all the countries who have generously supported COVAX, said: “This is a historical and highly complex effort – the likes of which none of us have experienced before. UNICEF is bringing to this global effort every ounce of the experience gained in saving millions of lives through the safe delivery of vaccines.”

“Our work with the Ministry of Health here in Vietnam includes support with planning, training, and communication, as well as the procurement and delivery of additional syringes, safe boxes, and fridges. Only with vaccine rollout to every corner of Vietnam can life and the economy start to return to normal, can we ensure children have uninterrupted access to schools, healthcare, and protection services. What a great moment for us all to join hands in support of the people of Vietnam,” added Flowers.

The vaccine procured for Vietnam is developed jointly by AstraZeneca and the University of Oxford and is manufactured under licence by SK Bioscience in South Korea. The AstraZeneca/Oxford COVID-19 vaccine has received the Emergency Use Authorization from WHO and is already used in Vietnam.

Hanoi (VNA) – Vietnamese commercial banks are required to issue chip ATM cards to improve customers’ transaction security from March 31, according to the State Bank of Vietnam’s Circular No. 22/2020/TT-NHNN.

This is part of the country’s roadmap to replace all magnetic strip cards with chip cards by the end of this year. The chip cards are compatible with Europay, MasterCard and Visa (EMV) standards as well as those of international card organisations like JCB and UnionPay.

International card-issuing organisations had asked Vietnamese banks to switch to chip cards that meet EMV standards to increase safety amidst a growing number of information thefts. Security experts have also warned Vietnam’s delayed transition to chip technology could put the country at risk of becoming a haven for card criminals from around the world as it is among the dwindling number of countries where magnetic swipe cards are still prevalent.

According to banks, issuing a chip card can cost some 1.50-2.50 USD, meaning they will have to spend between 105 million USD and 175 million USD for the transition, in addition to the cost of upgrading ATMs and core banking systems to adapt to the change.

Besides ensuring greater payment security, the replacement is also among the central bank’s plans to promote non-cash payment methods. Under the Government’s strategy, by the end of 2025, at least 80 percent of adults in Vietnam are hoped to have bank accounts and the number of non-cash transactions will expand by 20-25 percent annually.

However, banks said the switch faces significant barriers when their customers are hesitant to move to chip cards as they have to fill in a lot of documents from the banks.

To deal with the issue, foreign and domestic banks in Vietnam have implemented the e-Know-Your-Customer (eKYC) solutions to provide customers with seamless onboard experience and reduce paper-based procedures.

According to the State Bank of Vietnam’s Payment Department, Vietnam had 94 million domestic cards in circulation by the end of 2020, most of which were ATM cards./.

VNA