A new payments market will be created with the presence of more players, including commercial banks, fintechs, telcos and foreign investors.
The draft of a decree on non-cash payment to replace Decree 101 issued in 2012 is expected to be submitted to the Government by the State Bank of Vietnam (SBV) in June.
Under the Decree, there will not be any limit on the foreign ownership ratio in Vietnam’s intermediary payment service providers.
SBV once wanted to set a rule that foreign investors must not own more than 49 percent of shares in Vietnamese payment service companies. However, it finally decided to give up the intention.
An analyst commented that with the draft, SBV strives to open the market to attract more resources to develop a digital payment infrastructure. SBV agrees that intermediary payment is a new type of service based on technological achievements, so foreign investment plays an important role in its development.
|The report by Standard Chartered released in 2019 showed that 64 percent of financial institutions in ASEAN plan to modernize their payment infrastructure within two years. Vietnam will need huge capital to develop modern payment infrastructure in a plan to cut down the cash payment value to below 10 percent.|
The report by Standard Chartered released in 2019 showed that 64 percent of financial institutions in ASEAN plan to modernize their payment infrastructure within two years. Vietnam will need huge capital to develop modern payment infrastructure in a plan to cut down the cash payment value to below 10 percent.
A payment agent is a new concept mentioned in the draft decree, which, as commented by analysts, will pave the way for bringing mobile money into life.
Banks can assign agents to provide a part of payment services such as cash paying or withdrawing in and out of accounts, payment for goods and service bills.
The new policy will help popularize financial services by offering them to people who still don’t have bank accounts and find it difficult to access such services, especially those in remote areas.
The regulation also helps banks access clients without having to expand their network of branches and transaction offices, thus saving costs and improving business efficiency.
Once the market is open to more players, it will be bustling. However, strict rules need to be set to ensure the fairness and safety of the market.
According to Can Van Luc, chief economist of BIDV, the presence of mobile network operators in the payment market will create an unavoidable competition for payment service providers.
However, this is fair competition and it will help involved parties complement each other. The people who don’t have bank accounts, but are mobile subscribers will be the target of mobile money.
The digital economy in ASEAN generates $150 billion worth of annual revenue and is expected to be one of the world’s leading digital economies by 2025, according to Standard Chartered.
With an annual growth rate of 30 percent, Vietnam’s e-commerce market is expected to have value of $15 billion by 2020.
The fees for fast interbank fund transfers will be cut for the second time this year to promote cashless payments amid the rapid spread of the COVID-19 outbreak, the National Payment Corporation of Vietnam (NAPAS) announced on March 16.