Mobile money promises a revolution in payment

27-Feb-2020 Intellasia | Thoi bao Ngan hang | 6:02 AM Print This Post

The Draft Decree on cashless payment to replace Decree 101/2012 is consulted with the content related to the regulations of payment agency activities.

Banks are allowed to assign to agents providing payment services such as deposit and withdrawal of cash in and out accounts, and payment of goods and service invoices, etc. It is understandable that after the Decree on cashless payment are approved, all mobile subscribers can participate in electronic payment and can deposit and withdraw via payment agents. The arrival of mobile money is expected to compete with electronic wallets.

According to the Draft Decree, mobile money is an electronic money issued by an intermediary payment service provider providing telecommunications services and identifying customers through a mobile subscriber database. A representative of True Money Vietnam Co., Ltd wondered, the draft decree allowed telecommunications businesses to identify mobile money accounts via telecom accounts without going through bank accounts. However, e-wallets require bank account, then is it fair to say that the e-wallet will have difficulty expanding its customer file, affecting the market share of e-wallets?

However, most experts think that this is not a significant problem. In fact, banking and telecommunications are two different areas. Mobile money will largely target people in rural areas, remote areas, promote the development of ecosystems for the financial sector. There is competition but it has to be recognised that this is an opportunity for both sides, and each has its advantages and priority customer segments.

Le Anh Dungdeputy director of Payment Departmentrepresentative of the drafting unit confirmed that there was no distinction between e-wallets and mobile money. The addition of mobile money service is a payment intermediary service so that payment service providers can get other services after being licensed by the State Bank of Vietnam (SBV) to pay for other services, even with small value (mobile money).

This additional content is really necessary for people to pay anytime and anywhere with mobile devices connected to the internet, especially in remote areas. And the telecommunication company’s network will help support the provision of comprehensive financial solutions to people at lower and faster costs.

The drafting unit also informed, the addition of mobile money service content received the consent of a number of ministries and branches. However, to strictly control this form, it was still necessary to meet strict business conditions in this Decree.

In the scenario of promoting the digital economy in Vietnam, minister of Information and Communications Nguyen Manh Hung has made a number of recommendations including the pilot for mobile money in the first quarter of 2020. According to Hung, if licensing mobile money service for telecom operators, the area of electronic payment service will quickly reach 100 percent of people. Since then promoting e-commerce, agricultural commodity exchanges, especially in remote areas, promoting online public services, promoting Fintech companies, and innovative startups, helping to increase economic growth. All countries that allow mobile money generate economic growth of up to 0.5%.

From the experience of many countries in the world, it can be seen that the law plays a very important role in the development of mobile money. Therefore, experts believe that creating an environment for mobile money to develop is necessary, but along with that, there must be strict and under specific control. In addition, mobile money also needs to be built and developed based on the market suitability in each country, with different institutions.

Talking more about mobile money, Nguyen Thuy Duongdeputy general director in charge of EY Financial Services Vietnam said that there should be more specific provisions, detailed in the circular guiding when the Decree was issued to ensure the fairest competition. For example, the method of depositing money between e-wallets and mobile money was also different when recharge from e-wallets could only be recharged via bank accounts. While with mobile money you can top up via bank, scratch card, and ask someone to recharge for you via phone number.

Regarding the contents of the Draft, according to Nguyen Minh Thao, Head of Business Environment and Competitiveness Department, Central Institute for Economic Management, the draft needs to be finalised to create a legal basis for the operation of the business. The draft provides many provisions that can be considered as new business conditions as for payment service providers without accounts or payment agents.

According to Thao, these are not included in the list of conditional business lines under the Investment Law, so it is necessary to consider when developing regulations for synchronism. In addition, some business conditions in the Draft need more specific and clear regulations to create favourable conditions for businesses to apply.

Techcombank also found that it was necessary to have a mechanism to control the number of payment agents of these organisations because in case where the payment agent did not cooperate to disclose information, it was difficult for the agent to control the payment.

In addition, Clause 2, Article 25 of the Draft stipulates that the transferor is responsible for announcing the lists of signed payment agents on the websites and banking applications. According to a representative of Techcombank, before signing an agency contract with a payment agent other than credit institutions, the agent must check all information pages of other agents to ensure this provision.


Category: Finance, Vietnam

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