Apr 25, 2018 / 14:09

Foreign players heat up mobile payment market

The mobile payment market in Vietnam has heated up and attracted many local consumers in the first months of the year thanks to the participation of China’s two largest e-wallets of Alipay and WeChat Pay as well as Samsung in the service.

With more service providers, e-payment methods are diversified from e-wallet to the use of QR code and Samsung Pay in payment. 
Service providers estimate that 10 million e-wallets are in use in Vietnam
Service providers estimate that 10 million e-wallets are in use in Vietnam
There are now about 20 e-wallet service providers in Vietnam, including well-known names such as Momo, Ngan Luong, VTC Pay and Payoo. However, there is no official report from the State Bank about the number of Vietnamese e-wallet users. The agency said 3 million wallets had been issued in Vietnam by the end of September 2016. Service providers estimate that 10 million wallets are in use in Vietnam.
Analysts say this is a modest figure compared with the great potential of the market. But they say the market will heat up soon as the two Chinese players have arrived.
After the visit of Alibaba’s owner Jack Ma to Vietnam in late 2017, the Chinese group signed a strategic cooperation contract with Vietnam’s NAPAS to bring Alipay e-wallet to Vietnam.
With cooperation among NAPAS, banks and Alipay, sellers in Vietnam will accept payment in Alipay wallet made by Chinese visitors for goods and services in Vietnam. Sources said that the service will be launched this year.
WeChat Pay has announced a plan with Vietnam’s VIMO e-wallet which will accept payment of Chinese travelers.
VIMO.vn will be the first payment intermediary allowing Chinese travelers to use WeChat Pay in VND at shops accepting VIMO in Vietnam.
The cooperation does not include WeChat Pay’s use of VIMO’s banking connections to process payment transactions between Vietnamese consumers and businesses.
Thirty percent of total foreign visitors in Vietnam in 2017 were Chinese.
Current laws do not allow foreign e-wallets to operate in Vietnam independently. They can only be resent in the market through cooperation with Vietnamese companies.
An analyst said that Alipay doesn’t compete directly with Vietnamese e-wallets, but it could be a potential threat.
He went on to say that in the future the licensing policy may change and Vietnam will open its doors widely to foreign e-wallets that will provide services to Vietnamese customers as well.
Besides e-wallet, many service providers have recently also promoted the payment method using QR codes. Though launched for a short time, the payment method has surged sharply by 120 percent in the first nine months of last year, with 5,000 POS accepting the QR code. The POS number is estimated to increase 10 times by the end of this year to 50,000 points.
The presence of fintech firms has also helped the mobile payment market. More than 30 fintech firms were established in Vietnam as of 2016, two-thirds of which provide mobile payment services.
Banking expert Can Van Luc said that up to 44 percent of the bank’s customers use digital banking services, such as mobile banking, internet banking, and make non-cash payment for e-commerce.
According to experts, there are favorable for mobile payments to develop, such as the retail market and e-commerce are thriving, while bank cards and smartphones are more popular.
Reports from the State Bank of Vietnam showed the country saw a decline in cash withdrawals for the third consecutive year in 2017, with the rate reducing from 15 percent in 2016 to 10 percent in 2017.
The SBV has so far implemented a plan to develop card payment until 2020, in which it targets to have more than 300,000 card readers installed at points of sale to process some 200 million transactions per year.