Vietnamese Banks Make a Digital Wallet Push
A little under a month ago, Samsung Pay—one of the world leaders in mobile payments systems—made its debut in Vietnam. Apple plans to follow suit in the coming days by bringing Apple Pay into the picture as well, and that likely won’t be the end of mobile payments developments in the country. Naturally, all this is leaving Vietnamese banks concerned that the latest in gee-whiz technology will end up swamping their business model, and are hard at work to get dogs in the hunt.
The process has already begun, by some reports; back at the last Mobile World Congress event in Barcelona, Vietnam’s Viettel—a military-owned telecom group—showed off an array of telecom based apps and assorted gadgets designed to step up Vietnamese society. This includes the V Wallet mobile payment system, expected to arrive for general use in the weeks ahead.
V Wallet needs to hurry, however, as not only is Samsung Pay currently in play, and Apple Pay looking to step in, but Ant Financial’s mobile payments juggernaut Alipay is also working to land a Vietnamese license.
Already, banks are working to stem the tide of potential exodus from current products and services to the mobile payments field. The Military Joint Stock Commercial Bank, for example, is currently working with Facebook to bring a Facebook-based payment service into Vietnam, and the VNPT Media Corporation, along with the Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV) set up a deal to provide more services directly to end users, and that’s just for starters.
Give Vietnamese banks credit; despite the risk-averse nature of banking as a whole, it’s clear that the Vietnamese banks have seen a problem coming and are working to reduce the damage connected therein accordingly. Banks need to maintain their customer base or risk losing profitability, and if profitability is lost, costs have to be cut accordingly just to keep the doors open. Improving profitability, meanwhile, reduces the need to cut costs.
There’s something to be said for the first-mover advantage; it forces other businesses to offer a lot more than they would have had to to get in and get market share. Will this be enough to let the banks hold their market? Only time will tell, but banks are making the right move for now.