Vietnam aims to create mobile money sandbox for telecom firms

Photo by Luis Villasmil on Unsplash

The Vietnamese government aims to create a mobile money sandbox for telecom businesses in a bid to boost non-cash payments in the country, according to local media reports.

The scheme, which is pending for approval from the relevant ministries, will permit telecom firms to pilot a mobile money service not linked to consumers’ bank accounts.

Mobile money allows customers to transfer money using mobile phones. The service therefore could serve people without bank accounts, especially those in remote and hilly areas and lack access to financial services.

The country’s three leading telecom firms – Viet Nam Posts and Telecommunications Group (VNPT), Viettel and MobiFone – had earlier proposed to the government to formulate policies enabling e-payment services.

Governments across Southeast Asia are pushing ahead with efforts to create cashless economies, with less developed countries such as Vietnam and Thailand leapfrogging richer ones like Singapore and Malaysia in electronic payments, Nikkei Asian Review reported.

Vietnam has been promoting electronic payments since 2008. Only about 40 per cent of Vietnam’s 95 million people have bank accounts, mostly in urban areas, according to a recent report.

Meanwhile, there are around 120 million mobile phone subscriptions, and the telecoms network covers the entire country.

In Vietnam, the demand for e-payment options has increased significantly in recent years. By 2020, the country’s fintech market is expected to reach $7.8 billion with digital payment solutions  accounting for 89 per cent.