Vietnam’s major telecom plans to roll out 100,000 service points for mobile money in 2020

Telecom providers have been lobbying hard for mobile money to compete with other financial services providers.

State-owned Vietnam Posts and Telecommunications Group (VNPT), one of Vietnam’s biggest telecom providers, plans to roll out 100,000 service points for mobile money services in 2020 if the government approves a mobile money pilot program within this year.

VNPT and another state-owned competitor Viettel have been given the green light to roll out mobile money services once the pilot is approved. Telecom providers have been lobbying hard for this to compete with the growing number of e-wallet providers in the country that have attracted a lot of attention and funding in the ongoing fintech boom.

Vietnam has about 134 million mobile subscribers, which is more than its population of 96 million. Telecom providers believe they can reach people in the far-flung areas much better than other financial services providers and rural residents are more familiar and put higher trust on telecom providers.

Despite much improvement, Vietnam’s cash transaction rate is still astonishingly high, at around 90%.  E-wallets in Vietnam have to be linked with a bank account, according to local regulations. This automatically excludes about half of the population that currently do not have access to bank accounts.

Speaking at a government-sponsored event on the digital economy, Nguyen Nam Thang, deputy director of VNPT Fintech, said mobile money can open the door to many e-commerce players to capitalize on Vietnam’s population in the rural and provincial areas. He said that currently, Hanoi and Ho Chi Minh City account for 70% of e-commerce transactions in the country.

The latest Google-Temasek-Bain report on e-commerce in Southeast Asia for 2019 said that Vietnam is emerging as the most digital of all economies in the region, with the gross merchandise value of its internet economy set to account for more than 5% of the country’s gross domestic product in 2019.