Fintech needs to develop more besides electronic payments

17-Oct-2020 Intellasia | Thoi bao Ngan hang | 6:02 AM Print This Post

On October 12, the prime minister’s Economic Advisory Group collaborated with the National University of Hochiminh City held a Digital Economic Workshop named ‘Vietnam’s impacts, opportunities and leverage in Hochiminh City.’

Statistics showed that the number of Fintech (financial technology) companies participating in providing services in the Vietnamese market had nearly quadrupled from about 40 companies at the end of 2016 to nearly 200 at present. There were 38 units licensed by the State Bank of Vietnam (SBV) to operate intermediary payment. Therefore, most fintech companies wanted the State to have a policy framework soon to use technology to provide credit services, financial consulting and management.

Sharing with the wishes of Fintech, however, according to Nguyen Xuan Thanh, Member of the Economic Advisory Group of the prime minister, to become an electronic bank in the future instead of stopping at intermediary with the current payment, Vietnamese Fintechs must prove to the society that they were willing to meet small loans with the lowest level of risk and cheapest cost, more effective than loan models. Small and small was going on in society.

With the same point of view, Truong Van Phuoc, Member in charge of the Economic Advisory Group of the prime minister, had given a typical example. Accordingly, when a citizen needed only 3 million dong to pay hospital fees for their children at midnight, banks could rarely respond. Would fintech companies solve it at reasonable interest rates when financial companies were recently lending small amounts at 40 percent per year?

Besides, although society always welcomed new things, the State always had to consider the economy’s overall benefits. As having been the general director of a commercial bank, Phuoc shared that Fintech had come and competed directly on banks’ two major pillars, payment and credit. However, professionals must change their mindsets, and policymakers were also willing to support changing things that were already in their bloodstream to create a technological revolution. What was waited for was a legal system built to limit the system’s risk, said Phuoc.

Nguyen Duc Kien, Head of the Economic Advisory Group of the prime minister, also said that there had been a gap between policy mechanisms and technology development at present. Although there must be synchronisation between technology and mechanisms and policies in the development process, the main thought in policymaking was still to prevent risks for the whole economy. According to the report, SBV was currently drafting and amending Decree No. 101 on non-cash payments and a draft Decree on a controlled testing mechanism for Fintech operations in the banking sector. Nguyen Duc Kien emphasized that experts would advocate for a policy mechanism for Fintechs to operate in an appropriate business environment, harmonious between the macro balances and technological development in the market.

On the same day, some prime minister’s Economic Advisory Group members conducted a MoMo survey. MoMo was a creative Vietnamese e-wallet, currently had over 20 million users, linking with 25 commercial banks. With MoMo e-wallet, consumers could make payments at Co.opMart supermarkets, convenience stores and many other convenience services. Using services at some major schools and hospitals in Hochiminh City, customers could pay with MoMo e-wallet. Besides, for administrative violations in the transport sector, individuals and organisations that were then able to pay fines through the National Public Service Portal could also pay by MoMo wallet.

A representative from MoMo said that since the beginning of the year, the Covid-19 pandemic had harmed many business lines’ revenue. However, MoMo’s electronic payment activities had grown due to the need to buy and sell goods and services online increased.

This e-wallet was ambitious to build a technology system for cash flow management, connecting electronic payments for small stores. Simultaneously, this e-wallet application introduced products to individual households that needed to be sold right on the MoMo app. Economic experts calculated that with 5 million individual business households across the country when this e-wallet could connect half of them, it would create conditions for the State to manage the small business and production system through one payment intermediary.

Nguyen Ba Diep, the co-founder of MoMo e-wallet, suggested that the government should soon improve the legal basis for innovative businesses so that creative ideas were not outdated due to slow adoption. MoMo proposed the government to promote and expand payment for public services such as tax payment, social insurance, health insurance, administrative penalty payment, and non-cash and opportunity appropriate fees.

 


Category: Finance, Vietnam

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