Digital economy and fintech see growth amid COVID-19
The Prime Minister’s Economic Advisory Group met with the local fintech firm MoMo in HCM City on Monday.
|A member of the Prime Minister’s Economic Advisory Group scans a QR code with his MoMo e-wallet at a machine in HCM City on Monday. — Photo courtesy of MoMo|
Nguyen Ba Diep, co-founder and vice president of the firm, said: “The number of e-wallet users is growing fast after the pandemic, due to the popularity of contactless payments.”
Diep told Việt Nam News: “We are building big data systems and making MoMo a ‘super app’ that helps partners understand users and also give them a full payment and financial ecosystem.”
AppotaPay, a subsidiary of Appota Group, announced it had been licensed as a payment intermediary by the State Bank of Vietnam (SBV).
As a subsidiary of Appota Group – an entertainment, game and media firm with 55 million users – AppotaPay could now operate electronic wallet services, electronic payment gateways, and fee collection services, said the firm.
AppotaPay was the 39th non-bank organisation licensed by the central bank to operate in the payment service industry.
AppotaPay’s representative also said: "The pandemic has accelerated digital transactions in the country and helped the local electronic wallet market to grow," adding: "AppotaPay will make cashless payments more popular in Vietnam."
While meeting with MoMo, Truong Van Phuoc, member of the group, said there was a connection between traditional financial services and technology, adding: “The micro-credit model is a potential segment for e-wallets.”
Phuoc said finance companies offer very high interest rates for this type of lending, so there’s a need for a legal corridor for fintech companies to ease the burden for borrowers.
Diep from MoMo said there needed to be a legal mechanism for innovative businesses like MoMo, adding such support will help encourage local fintech firms to develop through supporting mechanisms for tax exemptions and reductions.
Nguyen Duc Kien, head of the Prime Minister’s Economic Advisory Group said: "We promise to always listen not only to MoMo but also businesses operating in the fintech sector, so that we can form a reasonable and harmonious business environment."
Earlier, at a national seminar on the digital economy in Vietnam, Tran Thi Lan Huong, senior public administration expert from the World Bank, said: “Six out of ten of the largest enterprises in the world today are specialising in digital and data technologies. The figure shows great opportunities and potentials for fintech businesses in Vietnam.”
According to forecasts, the digital economy in Vietnam is likely to reach US$43 billion by 2025. Hanoi and HCM City were also rated among seven major cities with fast digital economic development in the Southeast Asian region. VNS
Commercial banks could become technology firms by cooperating with technology firms, including telcos, to create a new growth space.
A study of Google and Temasek from Singapore reports that Vietnam’s digital economy reached 3 billion USD in 2015 and 9 billion USD in 2019, and will reach 30 billion USD in 2025.