Vietnam’s brutal e-wallet war takes another 39 players

’s e-wallet pie into the country’s brutal e-wallet war, but what would more players mean to the country with a 100-million-strong population, of which 60% are young occupants?

With this latest approval, the State Bank of Vietnam has to date granted licenses to a total of 39 service providers, among which are heavyweight names such as MoMo, Moca, ZaloPay, ViettelPay, and VnPay.

Momo is one of the most well-funded firms of its kind in Asia, having raised more than US$133 million since it was founded in 2013. On the other hand, Moca has enjoyed steady popularity after forming a partnership with Grab in 2018. ZaloPay is part of VNG, Vietnam’s only unicorn.

When AppotaPay — a unit of digital content producer Appota Group — announced that it has received a payment intermediary license from the State Bank of Vietnam last week, experts reckon it’s also taking on VNG.

In perspective, Zalo is VNG’s popular free messaging app, has 52 million monthly active users, and is looking to attract its users to ZaloPay. Meanwhile, AppotaPay, which claims to have 55 million users, could be a likely competitor to ZaloPay.

Attracting users is essential as a tipping point looms

With the emergence of more e-wallets in Vietnam, companies will be seen competing fiercely to gain many users to help them to turn a profit. The country’s digital payment is projected to reach US$8.6 billion in 2020, while the total transaction value is expected to grow by 14.1% to US$14.59 billion by 2024.

While most transactions are still conducted via cash, digital payments technology is evolving rapidly, and the government is also promoting a shift towards electronic payment media, in order to become a cashless economy by 2027.

Within the two main urban centers of Vietnam alone, MoMo, Moca, and ZaloPay are the top three most popular e-wallets, which account for more than 90% of the total share of e-wallet users. Momo, having amassed 20 million users or 21% of Vietnam’s 100 million inhabitants, is the first local firm to be counted among the top 100 fintech companies in the world since its launch in 2012.

But international consultancy Oliver Wyman believes not all of the e-wallet players in Vietnam will survive. “Already, the region’s crowded mobile payments sector is starting to shrink, with each national market expected to support only two mass e-wallets,” it said.

On the bright side, the State Bank of Vietnam’s statistic shows that about 15 million people use Internet banking and mobile banking services in Vietnam each month during the pandemic. The country has a daily average of around 30 million online transactions.

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