The Hanoitimes - The merging between two local start-ups Vimo Technology, a mobile wallet provider, and mPOS Technology, which develops portable point-of-sale technology, aims to add scale in the market where cashless payments are booming.
NextPay, a newly merged payment startup from Vimo Technology and mPOS, is in talks with investors to raise about US$30 million and anticipates closing the round soon, Bloomberg reported.
The merging between two local start-ups Vimo Technology, a mobile wallet provider, and Vietnam mPOS Technology, which develops portable point-of-sale technology, aims to add scale in the market where cashless payments are booming.
The capital will help the company as it plans an expansion into Myanmar and Indonesia in 2020.
Nguyen Huu Tuat, chief executive officer of mPOS, will become CEO of the combined entity. Nguyen Hoa Binh, who founded the two Hanoi-based startups, will be NextPay’s chairman.
Tuan said in an interview with Bloomberg that mPOS’s business model is quite similar to Square in the US, in that any merchant can accept payments easily, and Vimo is a mobile wallet similar to Alipay.
The merging of these two businesses into NextPay would provide a one-stop payment solution for merchants, added Tuan.
Vietnam has been promoting electronic payments since 2008. Only about 40% of Vietnam's 95 million people have bank accounts, mostly in urban areas, while there are around 120 million mobile phone subscriptions, and the telecoms network covers the entire country.
In January, the Vietnamese government issued a document asking the State Bank of Vietnam (SBV) to come up with new ways to encourage the use of e-wallets, such as allowing people to add money to their wallets without going through a bank account. It also approved a pilot project that enables money transfers and purchases through mobile phone accounts for small transactions.
According to a plan on non-cash payment in Vietnam in the 2016 – 2020 period approved by the Prime Minister, by the end of 2020, the ratio of cash transactions will be reduced from 90% in 2016 to below 10%.
As of September 30, 2018, Vietnam has a total of 18,170 ATMs, up 4% against the end of 2016, and 294,500 point of sales (POS) installed nationwide, up 11.8% compared to the end of 2016, informed Pham Tien Dung, head of the SBV’s Payment Systems Department.
The country is on track to reach the target of having 300,000 POS by 2020, Dung added.
The merger is aimed at helping NextPay capitalize on the shift. The combined company will have a presence in 11 cities across Vietnam, with more than 35,000 acceptance points. Already, Vietnam has a young, tech-savvy population where 70% use smartphones.
North Ridge Partners Executive Director Michael Gethen and Chris Tran, the firm’s head of Asia, advised on the deal.