Customers pay with e-wallet to enjoy the 50 percent cash back at a Circle K store in Nguyen Hue Street, Ho Chi Minh City. (Source: internet)Hanoi (VNS/VNA) - An economic expert has said e-wallet firms are breaking outpromotions to try and win large chunks of the high potential market in Vietnam.
Banking expert NguyenTri Hieu said millions of people in Vietnam already use e-wallet services to pay for everyday items like Grab rides,phone bills and groceries, but e-wallet firms are playing a long game.
MoMo, which has received 140 million USD of investment from Warburg Pincus, Goldman Sachs andStandard Chartered, leads the market with more than 12 million users,VinGroup’s VinID and Grab-backed Moca follow with 8 million and 7 millionusers, respectively. There are no clear user figures for the other e-walletfirms in the country, which total about 30.
According to the Department of E-commerce and DigitalEconomy, Ministry of Industry and Trade, Vietnam is one of the countries with the highest growth in e-payments in the world,with annual growth of 35 percent.
Nguyen Khac Quoc Bao, head of the Financial and BankDepartment from HCM City Economics University, said he thought the growth oflocal e-wallets is thanks to the considerable money firms spend onpromotions.
In the third quarter last year, Moca started refunding 20 percent up to 200,000 VND each electricity bill paid viathe wallet. Most recently, Grab offered a promotion at 14 parking lots in Vietnam where users only pay 500 VND for their parking and Grab pays therest via Moca.
Last November, Momo offered a viral promotion of 50 percentcashback with different types of services such as buying gasoline and shoppingat convenience stores. VinID even offers users who pay bills via thewallet for the first time discounts worth up to 550,000 VND.
VnPay, after receiving 300 million USD investment from Vision Fund of SoftBank and the Singaporegovernment's GIC investment fund, also refunded users for some in-store purchases.
AirPay, which belongs to Singapore based SEA Group, the owner of Shopee,offered free shipping service for Shopee users. It has also recently offered a30 percent discount for in-store purchases.
According to the expert, Việt Nam is a great market for Fintech firmsincluding the e-wallets as more than 80percent of the retail market is paid with cash.|
Hieu said Vietnam’s population of 97 million madeit a great market for e-wallet firms.
“The e-wallets are burning money now, but they will get the profit back ina certain time by starting to collect user fees for example,” he said.
Nguyen Ba Diep, CEO of e-wallet company Momo, seems to agree that the future isbright for firms like his.
“We expand our services in Vietnam byproceeding the payment in public services in some cities and provinces in Vietnam, most recently, southern Khanh Hoa province," he said.
Hieu predictedthat e-wallet firms would compete with each other by pouring moneyinto promotion like Grab and Uber did two years ago. Hieu said losers will burn all theirmoney, and a few winners “will take it all".
According to the 'e.Economy SEA 2019' report by Google, Temasek Holding andBain & Co, digital payments in Southeast Asia are expected to cross 1trillion USD by 2025, becoming thepayment method for nearly one in two dollars spent in the region.
E-wallets, though starting from a small base, are poised to grow evenfaster. Accounting for just over 22 billion USD in 2019, e-wallets in the region are likely to grow more than fivefoldand exceed 114 billion USD by 2025./.
VNA
