E-wallets were still actively racing with many great promotion strategies such as discounts, fees. The question was whether this race was a long-distance strategy.
Consumers through wallets were on the rise
In the context of complicated COVID-19 epidemic, on online shopping platforms and retail chains such as supermarkets, convenience stores, the level of electronic payment users was increasing sharply. This was partly due to the effects of the COVID-19 epidemic. Another reason was the incentives from e-wallets and banks.
Grasping the psychology of Vietnamese users was linking online gadgets with ‘great’ prices, ‘great’ offers, fintech platforms when joining the e-wallet race in Vietnam market all had to burn money to grow and attract users.
According to data from the National Payment Corporation of Vietnam (Napas), from the Lunar New Year to mid-March 2020, the total number of non-cash payment transactions via Napas increased by 76%, the full value of transactions increased by 124 percent over the same period in 2019.
Previously, mobile banking applications of banks only revolved around some simple transactions, such as balance inquiry, bank transfer, account information management. Then, with the development of banking technology digital, mobile banking applications currently met most user transaction and payment needs.
However, recently the market had changed a lot. E-wallets competed with each other directly, offering more food and drinks at the transaction points, which seemed not to be enough. E-wallets still spent strongly to launch refund programmes of up to 50%, introducing members to receive millions, discounting when recharging phone cards, paying utility bills, buying a movie ticket for 1,000 dong, and so on.
Recently, capturing the increasing demand of users during the season for services such as ordering food, drinks, payment of delivery services, or going to supermarkets, the e-wallet did not regret the money to give a series of ‘great’ deals revolving around these services.
Vietnam currently had about 43 million bank accounts, but only 10 million e-wallet accounts. Obviously, the e-wallet market was a lucrative and potentially untapped piece of pie that any fintech company wants to take part in.
‘Burning money’ game
The path of e-wallets was the same as the way e-commerce sites went to cloth last year, which could be called a ‘money-burning’ game. Besides investing in promotions, developing a payment ecosystem to provide a convenient and seamless payment experience for users was considered an important factor for e-wallets to keep customers on their long road. Therefore, the race of e-wallets was revolving two elements, finance, and payment ecosystem.
A new study published by market research firm Cimigo showed that, by the end of 2019, 90 percent of the market share of e-wallet users belonged to three players, including MoMo, Moca, and ZaloPay.
In terms of financial factors, all three wallets were backed by strong investors. Accordingly, MoMo received a large investment from Warburg Pincus last year, with undisclosed funds never less than $100 million in Vietnam. Meanwhile, ZaloPay was supported by the VNG parent company, which was the only $1 billion startup currently in Vietnam. Moca also had Grab, which was Southeast Asia’s second-strongest startup, to launch long-distance promotions.
In terms of ecosystem development, all three e-wallets had different strengths. MoMo could be considered as the first electronic wallet in Vietnam with the direction of diversifying online and offline payment services at shops and retail outlets. ZaloPay inherited the ecosystem of Zalo with tens of millions of users and became the payment channel for VNG’s services. Moca, meanwhile, chose a different direction to build a payment ecosystem when partnering with Grab to become a mobile payment solution for the entire ecosystem of this nifty app.
Cimigo’s research showed that MoMo and ZaloPay were most often used to recharge phones, transfer money, and pay recurring bills. Moca was mainly used for payment of technological vehicles, phone recharge, money transfer, and food delivery.
Looking at the features of these wallets, people could realise that these three big guys all had the same basic features, such as phone recharge, money transfer, recurring bill payment. However, Moca took the added advantage of being integrated into the Grab ecosystem, such as ordering cars, food delivery, delivery, or, most recently, to supermarkets and goods buying for households.
In general, pouring money into promotions during the market penetration period was a necessary move to help e-wallets attract new users. However, when considering the long-distance race, firm finance and a valid payment ecosystem were the factors that help e-wallets take the throne. This was clearly shown by the top three names of the current e-wallet market, which were Moca, MoMo, and ZaloPay.
