The Rise of E Wallet in Vietnam [PDF]

Zitiervorschau

The rise of EWallet in Vietnam HCM, May 2021

Table of contents 1

What is an E-Wallet

3

2

E-Wallet market – Huge potential for growth

4

3

Vietnam E-Wallet Market is booming

5

4

Vietnam’s crowded E-Wallet market

6

6

Regulations on E-wallets in Vietnam

9

7

Top E-wallet players in Asia

10

8

Challenges for the growth of the E-wallet in Vietnam

11

2

What is an E-Wallet Definition

E-wallet is a type of electronic card which is used for transactions made online through a computer or a smartphone. Its utility is same as a credit or debit card. An E-wallet needs to be linked with the individual’s bank account to make payments.

Similar stored value instruments

Debit/ATM card Plastic payment card that can be used instead of cash when making purchases. It is similar to a credit card, but unlike a credit card, the money is immediately transferred directly from the cardholder's bank account to pay for the transaction. Open or semi-close loop, virtual or physical, usually KYC or low KYC.

Loyalty Card Marketing strategy designed to encourage customers to continue to shop at or use the services of a business associated with the program. Today, such programs cover most types of commerce, each having varying features and rewards schemes, including in banking, entertainment, hospitality, retailing and travel. Close loop, virtual or physical, no KYC.

Gift card/Certificate Type of stored value card loaded with funds for future discretionary use. Only it contains a specific amount of money. Once this sum is spent down, the card can no longer be used. Gift cards also have expiration dates, which are often much shorter than that of prepaid cards. Open or close loop, virtual or physical, reloadable or not, usually no KYC.

Prepaid card Can be loaded with funds that aren’t linked to a bank account. The user can spend up to the amount of money on the card. Open or close loop, virtual or physical, reloadable or not, usually no or low KYC.

3

E-Wallet market – Huge potential for growth SEA Digital Financial Services are on a healthy trajectory

The rise of E-wallet in Vietnam

SEA Digital Payment Gross Transaction Value (GTV) (US $B)

While 60% of Vietnam's population (15 and above) is unbanked, much higher than other SEA countries, E-wallet penetration in Vietnam is 11%, just behind Singapore and Indonesia.

15%

3% 600

2019

620

2020

Gross Transaction Value (GTV) (US $B) E-Wallet 1% 3% A2A 18% 18% Cards Cash

21%

60%

2019

Accelerated growth for Digital Payments: With the boost from Covid-19, which are turning into lasting payment habits, SEA 2025 GTV estimates have been revised to US$ 1200bil

1200

20%

59%

2020

60

Portion of population (15 and above) (%)

17 2 Singapore

2025

24% 49%

10 Malaysia

15 11

16

Thailand

Indonesia

11 Vietnam

Of the 41 licenses granted for the payment service, 35 companies provide E-wallet services.

6% 21%

10

39

Decline of cash, adoption of ewallets:  Cash as payment method fell from 48% of transactions to 37% in 2020  In comparison, E-wallet rose from 18% to 25%

2025

E-wallet are rising in uptake, primarily among affluent, urban populations. Payment split 2019 Others; 5% Bank transfer; 23%

Forecasted payment split 2023 Others; 4%

E-wallet; 15% Bank transfer; 30%

E-wallet; 22%

Card; 31%

E-Wallet is expected to see a 12-fold increase in total transaction value in 2025

Card; 29% Cash; 26%

Cash; 15%

4

Vietnam E-Wallet Market is booming Vietnam has a pretty dense E-Wallet market

Top 3 players control close to 90% of the market

15 No. of Users

20 mil

~ 5.5 mil

6 mil (*)

Linked banks

25

25

19

Competitive advantage

 High number of users  High number of merchants who accepted payments  Many viral programs like lucky money, mobile game,…

20

35

In Vietnam, the e-wallet market is quite active when not only foreign suppliers but domestic suppliers also rush into the race. Telecom enterprises such as Vinaphone, Viettel, VTC, FPT launched VNPT Pay, ViettelPay, VTCPay and Pay FPT, respectively. Even Zalo which provides messaging service also made their move by launching ZaloPay. Domestic banks participated with Bank Plus products (cooperation between Viettel and MBBank), Timo (VPBank), MEED (Maritime Bank), Vi Viet (LienVietPostbank), etc. And lastly, financial technology companies joined the game with MoMo, VNPayQR, NextPay, Payoo, 1Pay, Bao Kim, Vimo, Mobivi, eDong, eMonkey, Pay365, TopPay, etc.

Number of transactions per day

 Link to Grab ecosystem

 More than 100 million users worldwide from VNG ecosystem (Zalo, VNG game, Zing, Tiki,..)

2.0

2.2

1.6

Value per transaction

VND 260,000

VND 230,000

VND 276,000

Value of payment per day

VND 520,000

VND 506,000

VND 441,600

89%

95%

84%

Continue to use without promotion (%) * Updated till end of 2019

5

Vietnam’s crowded E-Wallet market No. 1

E-Wallet

2

Zalo Pay

3

Moca

4

VNPay

5

Airpay

Momo

General info CEO: Pham Duc Thanh

CEO: Truong Cam Thanh

Strategy of funding - Jan 2021: Series A: $5.8M - Goldman Sachs - Jan 2019: Series B: $28M - Standard Chartered Bank - Mar 2016: Series C: $100M - Warburg Pincus - Jan 2013: Series D: $100M - Goodwater Capital, Warburg Pincus - 60% from VNG - 40% from no-infor partner

Key strategy - Promote connections with e-commerce companies - Next new direction, users will use Momo to go to the market, drink, go out, etc - Besides improving products, Momo will invest in infrastructure new technologies such as artificial intelligence (AI) to analyze customer behavior data and automate jobs to satisfy customers.

- Utilize the Zalo ecosystem to develop payment services - focus on customer base in remote areas with little opportunity to access financial products and services. CEO: Tran Thanh - Sep 2018: Corporate Round: Grab - Utilize the Grab ecosystem to develop users bases Nam - Feb 2017: Seed Round: $200K - Leading in terms of user usage frequency - Moca aims to build super apps on smartphones, seeking to work across borders. CEO: Le Tanh Jul 2019: Private Equity Round: $300M: - Develop QR Payment: apply AI technology to create smart consumption GIC, SofBankVision Fund habits, prevent risks,.. - Integrated VNPay QR Payment on mobile banking app of banks - Develop Mpos services - VNPAY will expand and promote payment development in many fields, especially payments for small businesses that have not previously been able to access new payment forms. CEO: Tran Tuan Anh - Tencent owned 30% through investment - In the Vietnamese market's long-term development strategy, the AirPay ein Vietnam Esport (Airpay owner) wallet will meet all the daily payment needs of customers and make shopping - 70%: no info investors more accessible and more convenient for all users. Besides bringing convenience in payment operations, many attractive promotions, and discounts, e-wallets constantly improve to increase customer experience.

No. of users - 23mil+ - > 120k payment acceptance points

- Intergrated with more than 70mil users from Zalo 2.5mil

- >100k payment acceptance points - VNPAY-QR: >30 online bankning app - > 15mil monthly active users

6

Vietnam’s crowded E-Wallet market No. 6

E-Wallet

General info Viettel Pay CEO: Pham Trung Kien

Strategy of funding - Owner: Viettel Group

7

Payoo

CEO: Ngo Trung Linh - Owner: VietUnion

8

Wepay

9

SmartPay

CEO: Phung Tuan Duc (Gojek) CEO: Marek Eugene Forysiak Chairman SmartNet: Nguyen Thi Trong Phu CEO: NGuyen Thanh Hung CEO Viettel Telecom: Nguyen Viet Dung

- Owner: Gojek

No. of users > 9mil users (2020 update)

- >40 linked banks - > 300 corporate partners - > 120k acceptance payment points

- Owner: SmartNet

The key strategy of SmartPay is to develop a wide network of small merchants - 1.5 mil individual users and retailers in remote areas - 400k micro merchant

- Owner: VTCIntercom

- Provide both e-wallet and payment gateway services: - Focus on bill payments, phone recharge card, game cards - building an ecosystem, a more complete technology environment while still being customer-centric - BankPlus of Viettel does not need a SmartPhone and does not need an Internet environment, just mobile network. Moreover, using BankPlus 2.0, customers do not need a bank account but still have an e-wallet - Utilize large ecosystem of CP group to provide diversity services to customers

- > 2000 linked corporate - 37 domestic banks - 800 viettel stores - 7500 money transfer points

VNP Group + MITSUI

- Payment intermediaries/ e-wallet/ collection services - Focus on improve infrastructures.

- >5.7 mil users - 1.4 mil trans/ month

NextTech

- Focus on providng services to merchants: online payment received, installement payment, cash collection, pay on behalf, Tokenization, MPOS, Payment link - Services for customers: Game card, mobile card

10

VTCPay

11

BankPlus

12

True Money CEO: Do Tuan Minh CP Group

13

Baokim.vn

14

Ngan luong Nguyen Hoa Binh JBC

CEO: Nguyen Duc Trung

Key strategy - ViettelPay is a personal finance product for everyone, including rural, remote, and isolated areas. - Develop Digital Banking services: launch lending service in 2020 - Building an electronic payment platform to open and serve multi-channel, multi-service, towards creating connection points for many related partners. - Develop bill payments customer base: > 350 invoices forms & >100k bil total transactions value/ year - Utilize Gojek ecosystem to develop cashless payment

Viettel Telecom

> 5mil users

7

Vietnam’s crowded E-Wallet market No. 15

E-Wallet Vimo

General info Nguyen Hoa Binh

16

Mobivi

Bruce Allan Butler

17 18

Edong Mpay

19

Viviet

Nguyen Quang Minh

Strategy of funding - NextTech - Plan to raise 30mil USD for NextPay (M&A Vimo & mPOS)

ECPay - Vietnam electricity Onepay Lien Viet Post Bank

Key strategy

No. of users

- M&A with mPOS - Focus on building the largest payment acceptance network in Vietnam to boost cashless payment in tradditional retails - Movi is on a mission to be one of the leaders in financial services space with our responsible & affordable lending - We have created customized financial products for this segment, which they can avail easily through multiple channels, which again are designed for their convenience. We have created special products for customers having difficult times due to the pandemic. - To help Vietnamese people pay electricity bills online By launching mPAYvn application, OnePAY wants to diversify payment solutions, bringing the best payment experiences to Vietnamese consumers. - boost cashless/ electronic payment gateway >2.7 mil users - online saving account, online money transfer, 24/7 online lending services for > 35k payment acceptance all classes with safty & utilities points > 40 linked banks

8

Regulations on digital paymen in Vietnam Regulations on E-wallets in Vietnam Circular no.

23/2019/TT-NHNN

Transaction amount Services

100mil VND/ month - Prohibit providing lending services for e-wallet customers - No paying interest on e-wallet balance or any actions leading to the increase value of money in e-wallet - Customers need to link e-wallet account with their Debit/ Credit cards before using e-wallet services - Customers need to provide valid ID or birth certificate (20mil VND has to used by eMoney to claim VAT - Payment service providers and payment intermediary service providers have to set a fixed price and public the of fees for their services.

KYC

- Customers: >15 years old to open payment account. If customers