In Vietnam, digital and mobile payment is undeniably the most developed and crowded fintech segment.
According to the State Bank of Vietnam (SBV)’s recently updated list, there are currently 30 licensed non-bank payment intermediary intermediary services in the country with around 20 of these offering e-wallets, according to Nikkei Asian Review.
In the space, M_Service’s MoMo mobile payment app is the undisputable leader with an estimated 10 million users, and Vietnam’s favorite e-wallet, according to a recent survey conducted by Nhip Cau Dau Tu magazine. MoMo is a mobile wallet and digital payment application that allows users to make cash transfers, pay more than 100 types of bills, recharge mobile phone accounts, settle personal loans, and purchase services including software licenses, online game vouchers, as well as airline and movie tickets.
Following on the step of successful Asian tech players and platforms like Tencent’s WeChat, Indonesia’s Go-Jek and Singapore’s Grab, MoMo has been working towards becoming a so-called “super app” and has integrated several new functions and services. Today, it counts some 10,000 partners in various fields such as consumer finance, insurance, utility and entertainment payments, e-commerce, shopping and transportation. It recently implemented a money saving feature.
Earlier this year, the startup closed a Series C funding round led by US-headquartered private equity firm Warburg Pincus. Though the company has not undisclosed the amount, Pham Thanh Duc, CEO of M_Service, said it is a record deal for an e-commerce or fintech startup in Vietnam. Deal Street Asia puts the number at round US$100 million, making it one of the largest single rounds ever raised by a Vietnamese startup.
According to Nguyen Ba Diep, executive vice chairman and founder of MoMo, though there are about 30 e-wallet service providers in Vietnam, only four have gained notable traction, namely MoMo, ViettelPay, ZaloPay and Moca.
ZaloPay, developed by ZION, provides a diverse mobile wallet ecosystem that includes different types of services. The platform allows users to pay for utility bills, make money transfers via QR code, and is integrated with bank accounts for cash withdrawals or purchases.
ZaloPay runs on Zalo, Vietnam’s premier chatting platform that counts more than 100 million users worldwide.
ViettelPay was launched in April by military-run telco provider Viettel. Viettel recently announced the establishment of a new subsidiary company called Viettel Digital Services Corporation (VDS) focusing on developing its digital ecosystem. In particular, the company has been tasked to develop a new mobile money service targeted at people in rural and remote areas that would allow users to transfer and receive money, as well as make payments via their smartphones.
Another Vietnamese telco that’s present in the digital payment space is VNPT, which operates the e-wallet service VNPT Pay. VNPT unveiled plans to get into the mobile payment business in January.
Other noteworthy e-wallets in Vietnam include V-FPT, a service operated by FPT Wallet, a joint venture between FPT, the largest information technology services company in Vietnam, and the group’s online shopping unit Sendo.vn; VTC Pay, a digital wallet and payment gateway by Vietnam Multimedia Corporation; and Payoo, a digital payment solution operated by Viet Union.
According to local media citing statistics from the SBV, there are currently an estimated 4.2 million authenticated e-wallet users out of the country’s nearly 100 million people, leaving plenty of opportunities for players.
Digital payment landscape set for consolidation
But Vietnam’s fast-growing, yet fragmented digital payment landscape, has begun witnessing the first signs of market consolidation.
In June, e-wallet service VIMO and point-of-sale (POS) startup mPOS, merged and combined their operations, reports Nikkei Asian Review. The new company, called NextPay, claims to have 1.5 million e-wallet users and more than 35,000 acceptance points across 45 cities. It estimates it will handle US$1.5 billion worth of payments 2019.
VIMO and mPOS founder Nguyen Hoa Binh, now chairman of NextPay, said the company is in the process of closing a US$30 million Series B funding round and aims to grow at home and expand abroad, with plans to enter Indonesia and Myanmar in 2020. It has also partnered peer-to-peer lending startup Vaymuon to begin testing merchant and consumer lending services this year.
Earlier this year, Vingroup’s loyalty program VinID acquired digital wallet app MonPay, a product created and run by local company People Care. The digital payment solution was integrated into the VinID app.
“We have many e-payment systems and different e-wallets and only a few will survive,” Binh Nguyen, discipline lead of finance at RMIT, told Nikkei Asian Review.
“The one that will survive, are the ones that are able to build up a proper ecosystem and in order for them to do so, they need funding. So this will either be through merger or foreign investors or domestic banks.”
ZaloPay is backed by VNG Corp., the country’s first unicorn, while Moca signed a deal in 2018 to operate as Grab Vietnams’ digital wallet service. AirPay is backed by Singapore Internet company Sea, and VNPay has received investment from Singapore’s sovereign wealth fund GIC.
Featured image credit: Edited from Unsplash