Twenty-seven payment service providers were licensed in Vietnam last March. Only 20 of them provide digital wallets and others provide services such as financial conversion, electronic clearing and payment gateways.
Twenty-seven payment service providers were licensed in Vietnam last March. Only 20 of them provide digital wallets and others provide services such as financial conversion, electronic clearing and payment gateways.
There are many reasons why banks, technology companies and FinTech companies are venturing into the e-wallet world, and the globalization of digital banking and the establishment of financial start-ups are the most major reasons.
In addition, a lot of young Vietnamese are compulsive smartphone users, who are into technology and lack interest in traditional banking services. In addition to the free social networks, they have started to apply electronic services to their daily needs, especially e-wallet. From transportation to food delivery, e-wallet comes with safe and convenient non-cash payments.
Who are e-wallet providers?
MoMo, Bankplus, ViViet, VTC Pay, WePay, Mobivi, Vimo and Moca are probably names that pop up immediately in one’s mind.
As of December 2017, MoMo has had more than 5 million users and this figure is expected to triple this year. Vi Viet has more than two million users and hopes to increase the number to 3.5 million this year.
Last year, the representative of the State Bank of Vietnam, said that only about five e-wallet providers gained profit and others were labelled "unstable".
The representative of LienVietPostBank (owner of Vi Viet) said: " It takes time for E–wallet to meet customer needs and market expectation, and the habit of using cash cannot be broken in the blink of an eye. In order to experience the utility and convenience of e-wallet service, time is a major factor. "
E-wallets need more time to develop to meet customer needs and market industry insiders say each e-wallet has its own development strategy and targeted customer segment. However, they have acknowledged that the failure of many e-wallets providers in adapting to the financial ecosystem in Vietnam and the lack of widely accepted payment gateways have kept the industry going.
In 2017, MoMo attracted more customers by offering discounts and promotions and spending on advertising. This year, it decided to harness the power of the ecosystem by signing an agreement with Uber Vietnam. Unfortunately, Uber withdrew from Southeast Asia a few months later.
Zalo Pay is a new comer who achieved great success early this year by running a "lucky money" campaign during the Lunar New Year that allowed users to donate money to loved ones by using their e-wallet.
The campaign is also a big hit in China when it was also ran byWeChat and AliPay.
Zalo has an advantage over other e-wallet competitors because it already has a huge user database from its messaging app.
Fierce competition
A recent handshake between Moca and Grab could be one of the motivating factors that changed the game. The CEOs of both companies are eager to develop their e-wallet service with the motto "if we grow up, we grow together."
More specifically, this agreement shows that collaborators with Moca e-wallet will benefit from the high number of Grab populations of millions of drivers and passengers nationwide.
Momo's popularity, Zalo Pay's rise and the Moca-Grab “marriage” have put pressure on dozens of other e-wallet providers.
Traditional mobile payment services of Vietnamese banks are also threatened by competitors.
In response to this challenge, TPBank has updated its flight support service on its mobile application.
UOB Vietnam now allows the opening of new account applications within 10 minutes, reducing the time required to open a bank account at 80%. In big cities like HCMC, four out of five people with smartphones have dealt with their daily tasks faster and more conveniently thanks to e-wallet service of this bank. UOB expressed its desire to develop and leverage technology to make banking services much simpler, safer and smarter for customers from the first transaction.
