Vietnam wants to reduce the number of cash transactions to less than 10% by 2020. The government also aims to increase e-commerce market to US$7.5 billion by 2025. This has attracted global fintech companies in mobile payment sector. Vietnam has smartphone ownership of 74% in urban and 55% in rural areas, which enhances the market attractiveness for mobile payment companies. The major players include MoMo, Moca and VNPAY.
According to PayNXT360, mobile payment transaction value in Vietnam expected to increase at a CAGR of 23.5% during 2018-2025. Over the forecast period of 2019 to 2025, the market is expected to reach US$ 28.8 billion by 2025, increasing from US$ 8.7 billion in 2019.
To encourage non-cash payments, the government is planning to hike fees on cash payments, while reducing it for digital payments. It is also planning to get social welfare and pensions paid through electronic payment methods.
About a third of tourists to Vietnam are Chinese and both Alipay and Wechat are now eyeing Vietnam. Alibaba in 2017, entered into a memorandum of understanding with National Payment Corporation of Vietnam which allows Chinese tourists to use Alipay while in Vietnam. Wechat pay has joined hands with Vietnam’s VIMO e-wallet. Foreign players are now investing in Vietnam’s homegrown fintech companies, examples of which can be South Korea’s UTC’s 65% stake in VNPT epay, NTT Data’s 64 percent stake in Payoo and Thailand’s True Money’s 90 percent stake in 1Pay.
Currently MoMo is the leading mobile payment app in Vietnam. It offers services from over 400 companies and has over 10,000 companies using it. Earlier, it became more popular when it joined hands with Uber to be its native app wallet. Moca on the other made the headlines in September 2018 when it signed a partnership with Grab to launch GrabPay by Moca. VNPAY after creating the record for the “first payment gateway to integrate QR code payment into mobile banking applications” is predicted to have more than 50,000 point of sales accepting QR code payment method in the near future. It also offers various services ranging from ordering food to booking air tickets. Ononpay is another emerging player which is targeting the unbanked population of Vietnam with simple mobile wallet top-ups at its more than 3,000 transaction points and has attracted many with its offers and loyalty programmes.
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