Vietnam's financial and banking industries are experiencing a digital wave, with payments through mobile banking services surging by 144% annually over the past five years. Pham Tien Dung, head of payment Department of the National Bank of Vietnam (SBV), cited a survey data released earlier this year by SBV at a banking digitization conference in Hanoi, pointing out that banks have been investing heavily in network infrastructure to digitize their services and operations.
By the end of April this year, 94% of local banks have invested in digitizing their business, and 42% of them have made digital banking the top priority of their business strategy. Vietnam's Internet banking services have increased 6.3 times over the past three years.
Many banks hope to seize the opportunity to modernize their business models. For example, Vietnam's automatic banking system LiveBank and VPBank. VPBank uses digital banking platform Timo to provide financial services for young people.
In September, VPBank launched its own independent digital bank YOLO, which provides daily services such as taxis, movies, hotel reservations and catering orders in addition to traditional banking services such as savings accounts and loans. The idea of YOLO is to provide a digital ecosystem combined with banking services and provide diversified services.
Le Minh Hung, chairman of SBV, mentioned in the question-and-answer session of the Digital Banking Conference that in addition to mobile payment and online banking, the use of POS machines and inter-bank electronic transactions has also increased significantly in the past few years. Experts say the development of Internet banking, digital payment and biometrics technology will help banks bring new and convenient services to customers and help them achieve sustainable growth. The conference also pointed out the potential of financial technology to improve financial universality.
OnOnPay, a mobile wallet developer, targeted at the non bank account crowds in Vietnam's three line and rural areas. Viettel Pay, the new digital wallet division of Telecom, has reached 2 million users in just four months of operation and is gradually providing services to rural and mountainous users.
Viettel has entered the field of digital payment, showing Vietnam Telecom's entry into this field. The wide coverage of telecommunications companies means that the financial services provided by these companies may cover 100% of Vietnam's population.
Vietnam central bank promotes digital payment and development of Internet Banking Nguyen Kim Anh, vice chairman of SBV, said the National Bank of Vietnam was willing to create an enabling environment for financial technological innovation. SBV attaches great importance to fine-tuning the legal framework, establishing and promulgating laws and regulations, and adjusting the direction in order to strengthen the development of information technology infrastructure and the security of the banking industry. He also said that SBV had established the National Interbank Electronic Payment System (IBPS) and the National Credit Information Center, both of which were running smoothly.
It is pointed out that SBV has issued ten notices to promote non cash payment and ensure the safety of payment activities. SBV and Vietnamese TV also jointly launched a program called Smart Money and Wise Children to raise public awareness of financial services. Earlier this year, Vietnam's prime minister approved a new digital payment platform project submitted by SBV, which focuses on public services such as taxes, electricity, water, tuition, hospital fees and social and public welfare projects.
According to the alliance market research report, Vietnam's mobile payment market is expected to reach 70.937 billion US dollars by 2025, with an annual compound growth rate of 18.2% from 2018 to 2025. In 2016, the market value was US $160 million 540 thousand.
As Vietnam has been investing in digital infrastructure and payment services (including NFC payments), NFC transactions are expected to become the fastest growing country.The report points out that changes in customer preferences, the surge in demand for instant transactions, the increase in Internet and smartphone penetration and the growth of the e-commerce industry have been the main drivers of market growth.
Although there is no official report from SBV, service providers estimate that 10 million people in Vietnam are using digital wallets, which is not a big number compared with the huge market potential.
Some of Vietnam's most famous digital and mobile payment platforms and start-ups include MoMo, 123 Pay, Mobivi, Ngan Luong and Payo. Digital wallet providers recently launched loans and other services to diversify their products. In October this year, MoMo joined hands with Bank of New Korea, and users can apply for loans from Bank of Korea through MoMo digital wallet. MoMo calls about 5 million user service.
On the other hand, GrabPay integrates Moca into a cashless way of payment in their applications. Because Grab needs a license, Moca is one of the holders of Vietnam's mobile payment license.