Nguyen Manh Hung, Minister of Information and Communications

Prime Minister Nguyen Xuan Phuc has given the go-ahead for a pilot application of Mobile Money, which allows the use of mobile phone accounts to pay for small-value goods and services. This model will not only bring an innovative payment solution to users, but also create a turning point for Viet Nam’s digital transformation process.

Vietnam News Agency talked to Nguyen Manh Hung, Minister of Information and Communications, about the electronic money project which is endorsed by the ministry and the State Bank of Viet Nam.

What are the prospects for mobile money use in Viet Nam?

The world has seen the continuous development and innovation of information technology and telecommunications, especially the boom of mobile communications with the popularity of mobile phones.

Mobile Money is present in 95 countries with more than one billion registered accounts and an average daily transaction value of US$1.9 billion. This service not only allows subscribers to input and store money, make fund transfers or withdraw money on phones, but also provide other services such as savings, credit and insurance, etc.

We have talked a lot about e-commerce, start-ups and innovation but forgot one of the most important platforms to promote them – the payment platform. For a service to be popular with 100 per cent of people, the payment platform must reach all of the people and there is no better way to do that than Mobile Money.

In Viet Nam, the rate of credit card utilisation remains low but mobile subscriber density has been more than 100 per cent for many years. With popularity and small value payments, Mobile Money will together with the banking system and other non-cash payment systems provide a full range of payment methods, satisfying people's needs.

Mobile Money is a tool to ensure equal access to essential services for all people in the banking and finance sector which is one of the key goals of financial inclusion. Its main goal is to increase access to cashless inclusive financial services for the poor, the underpriviliged who are less able to access modern financial means such as bank cards or mobile banking.

In Viet Nam, the number of people with bank accounts is 63.7 per cent in both urban and rural areas but still a large number of people, even in cities, does not have a bank account. Among those with a bank account, many only use basic features such as withdrawing money (workers in industrial zones) and do not have means or skills to use mobile banking apps.

Mobile Money is the most viable payment solution for these people. With a basic mobile phone and simple operation, poor and disadvantaged people can access non-cash financial services, transfer money and pay for legal goods and services. Therefore, allowing Mobile Money services will bring great benefits to people.

How have telecom enterprises prepared for this pilot implementation?

The deployment of Mobile Money is in line with the non-cash payment trend in the world. Security and convenience are top criteria.

Viettel is a telecom enterprise that has experience in providing electronic financial services under the central bank’s intermediary payment corridor. Thus, for the Mobile Money service, Viettel has a network of sale points providing services and technical infrastructure that fully meet the requirements of the State Bank and is ready to provide services as soon as the Prime Minister signs the pilot decision.

Viet Nam Posts and Telecommunications Group (VNPT) also has a modern, widespread network infrastructure, directly connecting with more than 240 countries and economic and financial hubs around the world with three terrestrial optical cable lines and five marine optical cable lines.

This is also the only company that owns a satellite information network in Viet Nam. VNPT satisfies the highest requirements for national information security as well as diverse needs of customers. It is prepared for all infrastructure, technology, policy and human resources.

With regard to technology, the system must comply with the information technology standards of the banking sector, operate continuously and ensure the Payment Card Industry Data Security Standard (PCI DSS). Transactions must be encrypted and authenticated; encrypted customer data; store all transaction history, account balance of customers; issue information security policies by levels. Enterprises must authenticate customer identification, detect and prevent fraudulent transactions.

Are there any obstacles for businesses in the implementation process?

Enterprises must pay great attention to three basic issues including security, risk management and customer identification.

For security, opportunities offered by Mobile Money are enormous but this is also a challenge in ensuring safe transactions. Enterprises must always focus on researching, investing and updating technology solutions to ensure the highest security and safety for both customers and systems. In addition, they must ensure financial capacity through secure accounts to be ready for payment for potential losses.

Regarding risk management, the service employment goes with certain risks. However, enterprises have carefully prepared in storing customer information, ensuring the authenticity and synchronous compatibility of the system. To date, businesses are ready to launch Mobile Money services.

For customer identification, enterprises have built tools for the websites and tellers at the transaction points to control end-of-day transactions as well as fund reimbursement tools.

What measures has the ministry implemented to ensure the identification of Mobile Money accounts amid fraudulent SIMs (SIMs that do not have accurate subscriber information)?

Know Your Customers (KYC) using Mobile Money is very important, requiring telecommunications businesses to accurately identify customers using the service. However, this action needs to make use of the telecommunications infrastructure and data of carriers, avoiding re-collecting existing data.

Therefore, MIC has collaborated with the State Bank of Viet Nam to request enterprises to take the following actions to eliminate the use of junk SIMs to register to use Mobile Money services, including providing identity card/passport that is used to register their mobile accounts which are verified by telecom enterprises. Customers must use mobile services for at least three consecutive months by the time of Mobile Money service registration.

Telecom enterprises are responsible for building tools for risk management and customer identification to ensure authenticity. They will be suspended from participating in this pilot programme if they provide services to customers using incorrect subscriber information. — VNS