The switchboard function of Banknetvn, Smartlink, VNBC are consolidating. According to this article, Smartlink and VNBC shall continue their services other than switchboard.
The "other services" include e-payment. What could this mean to the e-payment industry?
- This can buy some time for independent (i.e. non bank-based) e-payment service providers to speed up their customer acquisition.
- When freed from the switchboard business, Smartlink and VNBC can focus on providing e-payment services which would pose a threat to independent players.
All in all, I’d look forward to see more e-payment services, especially ones which connect core-to-core to banks.
During Asia Pacific ICT Summit I received a question on development of e-Commerce and @opspecgsmb tweeted that it depends on credit card penetration.
Dependence on credit card never happened in China and it is not happening in Vietnam.
The situation in Vietnam (which many Singaporeans may find different from that of their own country)
- Still a cash economy
- People love buying topup cards
- Bank card penetration is only 30% of the population
- It takes an urban Vietnamese 5 minutes to visit their local mom-and-pop shop
- Every household possesses personal vehicle
- It costs 50 cents to deliver goods from a warehouse to a location in the city
- Buyers haven’t trusted online transaction
Here are what e-commerce companies in Vietnam are doing:
- Setup distribution network with local mom-and-pop shops, pavement stalls, internet café. Provide these agents with physical topup cards or web interface or SMS interface. Exploit (4)
- Cash on delivery. Exploit (3)
- Partner with post offices. Customers can pay at post offices.
- Provide cash collection services
So customers don’t even need to have bank accounts to buy and trade online, not to mention credit cards.
Of course, it sounds primitive but that’s what’re happening while we wait for the adoption to hit critical mass.
Where is the role of technology?
We can use PayPal. There are also local PayPal clones with much lower fees. With a local bank debit card (I don’t even need a Visa/Mastercard), I can buy stuffs online and perform interbank transfer for free (at least free for now when companies are educating users).
The obstacle is buyers habit and problem of trust.
Groupon clones have helped buyers become more comfortable buying and paying online.
I’ll write a separate post on solving the problem of trust.
So that pretty much wraps up one point on infrastructure for e-commerce in Vietnam. If you’re interested please CLICK HERE to read more.