17 December 2021

The State Bank of Vietnam has allowed Viettel to pilot mobile money service, just a week after licensing MobiFone and Vietnam Posts and Telecommunications Group (VNPT) to do likewise.

Viettel customers will be able to use their mobile subscription as a bank account, buying and selling low-value goods and services, as well as directly withdrawing, depositing, and transferring funds.

With over 65 million subscribers and market share greater than 50%, the availability of Viettel’s mobile network far exceeds that of the nation’s banks, with some predicting that widespread and rapid uptake of Vietnam’s burgeoning mobile money services could put pressure on banks.

However, Pham Trung Kien, chief executive officer at Viettel Digital, said mobile money does not necessarily pose a threat to the nation’s banks and may, in fact, boost citizens’ engagement with financial institutions once they realise how convenient cashless payment is.

“Some studies estimate that in Vietnam, only about 30% of the adult population have a bank account, and when we create a habit of using electronic payments, the remaining 70% will be customers of banks,” Kien added. “Thus, Mobile Money not only competes but also promotes use of bank accounts when they are familiar with electronic payment methods.”

Recent data from Omdia suggests that this trend towards a cashless society is already accelerating in Vietnam, with payment card market penetration set to increase to almost 50% by 2025.

Meanwhile, Viettel is working with the city of Da Nang to turn it into a smart city by 2025. The first steps of the plan include the deployment of a 5G network at Da Nang Software Park.