Credit cards for ordinary customers, a big market remains untapped

Created 06 May 2022
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Masan Group Corporation has spent US$65 million to acquire a 25 per cent stake in Trusting Social JSC, a Vietnamese subsidiary of Singapore’s Trust IQ Pte. Ltd.

Masan has tied up with Trust Social to issue one million credit cards to ordinary customers who have not used banking services, do not have an account or have not fully accessed financial facilities, in 2022. — Photo courtesy of Masan

Masan Group Corporation has spent US$65 million to acquire a 25 per cent stake in Trusting Social JSC, a Vietnamese subsidiary of Singapore’s Trust IQ Pte. Ltd.

Through this partnership, Masan aims to issue one million credit cards to ordinary customers who have not used banking services, do not have an account or have not fully accessed financial facilities.

Two third of consumers in Việt Nam unbanked

Trusting Social is a fintech company specialising in credit scoring. Founded in 2013, it took only seven years to assess the credit scores of over one billion consumers in Việt Nam, Indonesia, India, and the Philippines through the use of artificial intelligence, big data and machine learning.

The partnership with Trusting Social will help accelerate the transformation of Masan into a consumer - tech offline-to-online digital ecosystem to provide retail and consumer AI and machine learning-led solutions as well as broaden its financial product offerings, thereby enhancing the customer experience.

This strategic step comes from Masan Group's philosophy of "satisfying the evolving big unmet needs of the Vietnamese people."

Nguyễn Đăng Quang, chairman of Masan, said, "Along with Trusting Social, we are trying to change somewhat the situation of the market."

Currently, Vietnamese consumers are paying high costs for financial products and services because these are not yet popular.

Banking costs are too high for people, especially in rural areas, and the lack of credit scoring capacity for the majority of ordinary customers makes much of the populace unfamiliar with credit cards and opening a bank account.

As a result, two-thirds of Vietnamese consumers remained unbanked.

The proportion of people with credit cards and insurance was 4 per cent and 2.4 per cent respectively.

This means consumers have to use informal financial channels, where costs are usually three to five times higher than formal credit.

In addition, after two years of being affected by the COVID-19 pandemic, people's payment habits have undergone great changes. Together with an increase in online shopping, many digital payment methods have been created and become popular such as chip cards, QR codes, e-wallets, and mobile banking applications.

It can be said that this is the right time for Masan to enter this field.

Masan is building ‘Point-of-Life consumer-tech,’ an offline-to-online digital ecosystem. — Photo courtesy of Masan

Nearly 2,700 credit cards issued in just 3 minutes

Masan has redefined the scope of its operations, not just stopping at a normal consumer goods company but it will serve consumers’ entire consumption needs from birth to adulthood and old age (or lifetime consumption), to which each person will use up to 80 per cent of their income to spend. To make it, the company will evolve and connect all platforms together so that it can meet consumers’ essential, financial and lifestyle needs.

Nguyễn An Nguyên, CEO of Trusting Social, said his company and Masan would create platforms that would serve as the basis for developing breakthrough products in future.

The first is a hyper-personalised platform which reveals what customers need before they buy a product. The second is a loyal customer platform. With its diverse customer ecosystem and through machine learning and big data solutions, Masan will understand more about customer needs to better serve them. The last one is the platform for financial solutions such as credit cards, micro-insurance, micro-savings, and so on.

A Masan spokesperson said the company’s goal is to issue one million new credit cards this year. This is a 3-in-1 card including an EVO credit card and loyalty cards of WinMart/WinMart+ and mobile operator Reddi.

Quang said: “In Việt Nam, 80 per cent of consumers do not have a bank account or a fixed income. Banks therefore are unable to assign appropriate credit limits for them. As a result, Vietnamese consumers, especially small traders and farmers in rural areas, can only satisfy their financial needs in unorthodox ways that implies rather high risks.

“Through the partnership with Trusting Social, we are trying to somewhat change the status quo of the market. The first thing is to offer the opportunity for consumers to access the lowest credit and credit interest rates. We believe that if we can do this we will create value not only for consumers but also for society.”

Masan and Trusting Social had an impressive demo that enabled guests at Masan’s annual general meeting and followers on the online platform to experience opening cards online.

Normally the process of issuing a bank credit card takes 5-7 days, with customers having to go through many procedures and provide proof of income to be issued one. But with AI and machine learning technology, Masan and Trusting Social have significantly reduced the time taken and procedures involved for card registration.

At the AGM, 2,694 credit accounts were successfully verified in just three minutes via, and allotted combined credit limits of VNĐ815 billion, equivalent to VNĐ5 billion limit per second.

The use of technology has removed barriers in acquiring a credit card as all interaction phases between customers and banks, from registration and identification to assessment are digitised and completely done online, and customers receive credit limit results in a short time.

Thus, the opportunity for customers to own a credit card is equal, regardless of geographical location, occupation or spending purpose.

Source: VNN

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