The presence of many new players makes the e-wallet market in Vietnam not only more exciting, but also extremely harsh with the “bloody war”, when competitors compete fiercely to gain market share. Will users benefit from that?
Be Group Joint Stock Company (the owner and developer of Be ride-hailing application) and Vietnam Prosperity Joint-Stock Commercial Bank (VPBank) have joined hands to establish new financial service beFinancial.
beFinancial provides VPBank’s financial services based on Be’s technology and financial technology ecosystem, including payment functions, reward exchange and loyalty programmes, and other financial services.
In this year, Be Group and VPBank plan to launch payment and financial services for individual customers, drivers and business customers. In particular, the two sides will launch co-branded credit and debit cards, providing convenient payment solutions for customers. Later, Be Group will cooperate with other partners to develop health and education services.
Thus, with beFinancial, VPBank and Be Group have eliminated the monopoly and the exclusive use in the market today by becoming a platform rather than an application, allowing and welcoming many suitable brands to exploit. Therefore, Vietnamese start-up, small and medium-sized enterprises (SMEs) can cooperate to develop together.
The reason why Be chose SMEs is that this business sector contributes 40 percent of the country’s GDP and creates 60 percent of jobs for Vietnamese workers.
Jean Pierre Gagnon, director of beFinancial said, beFinancial application would open payment management portal for users, so 90 percent of paper costs had been saved thanks to the digitisation process. Businesses could experience automation, without changing the current business environment.
Be Group has operated the ride-hailing application for less than one year and VPBank is regarded as a big financial supporter to Be Group to compete against Grab, Go-jek (Go-Viet). At the time of launching, Tran Thanh Hai, general director of Be Group disclosed, Be had thousands of billion dong and more to confidently operate well in the market. That meant, in the short term, Be did not need to call capital from investment funds and had not thought about exporting the applications as its competitors did.
Hai was confident, that Be did not use the strategy of pouring money for users to grow fast, but it focused on drivers, the only approach that could compete with the giants like Grab and Go-Viet in the Vietnam market.
Be and VPBank moved to join the e-wallet market and financial solutions at time when there were many big questions behind the operation related to this field of Graba foreign ride-hailing application that dominated the market, making the competition more fierce and attracting the attention of users.
The e-wallet market is becoming more active and this type of payment is gradually familiar with modern lifestyle. By grabbing development opportunities, over the years, investment funds have continuously cooperated and poured capital into Vietnam fintech market. In particular, over the past year, payment companies have expanded their presence in potential markets like Vietnam through incentives, promotions and intense cooperation.
Most recently, VinID Joint Stock Company has completed the procedure to buy shares of People Care Joint Stock Companyowner of MonPay e-wallet, which is not very prominent in a market with fierce competition. VinID is Vingroup’s loyal customer care programme, which applies to customers who use the Group’s ecosystem products and services such as shopping, consumption, relaxation, health, education and entertainment.
In the period from 2016 to 2018, the number of fintech companies providing services in the Vietnamese market increased from 40 to nearly 100 companies. In particular, the payment sector plays a key role with 26 companies licensed by the State Bank of Vietnam (SBV) to provide payment intermediary services, including MoMo, ZaloPay, Payoo, MobiVi, Bankplus, 1Pay, Vi Viet, VTC Pay, Moca, WePay, Ngan Luong, VnMart, Pay365, TopPay, etc.
In particular, four “big” brands including Viettelpay, MoMo, Zalopay, Airpay attract significant attention of users, because they own different strengths.
Momo focuses on attractive promotions, purchases on e-commerce sites, online payment and service bills (electricity, water, post-paid phone subscribers…). Viettelpay features a transfer account, online scratch card purchase and online payment. Meanwhile, Zalopay and Airpay are strong in online game scratch cards. Airpay also stands out for the online purchase of food.
However, in addition to boosting the convenience in payment operations, lots of attractive promotions, high discounts and low surcharges, e-wallet brands in the market still have much work to do to increase the customer experience.
According to the statistics, about one-fourth of the e-wallet users admitted that they initially registered to participate in promotions from suppliers. After a period of use, they have formed the habit of buying goods online and paying via e-wallets.
However, a large number of users still face difficulties when using e-wallets, due to the operation of linking bankcards, registration and OTP codes. This is a challenging problem to e-wallet applications, because customers are increasingly impatient in the current technology era. It is the difficulty in the initial registration that will hinder the increase of new users.
In addition, the delay in responding and not answering the right questions by e-wallet service providers makes users feel insecure.
In developed countries, people rarely use e-wallets because of the popularity of credit cards. E-wallets are only suitable for markets that have not yet popularised credit cards like Vietnam or Southeast Asian countries.
In Vietnam, the e-wallet market still has great potential, because the proportion of people not using e-wallet is quite large. In particular, from a policy perspective, there is a proposal not to use cash to pay electricity, water, tuition fees as well as other living expenses in urban areas from December 2019.
Tenzin Dolma Norbhu, Facebook’s Asia-Pacific Policy director, said that the business of mobile applications had contributed greatly to the total consumer surplus of about $6.4 billion at Vietnam market in 2018. In particular, the value of payment through e-wallets also contributed a part, especially transactions and payments for services and utilities of daily life.
While banks are cumbersome and handle slow transactions, e-wallets have the advantage of connecting easily with diversified services. Therefore, in Vietnam, there are more and more new e-wallet brands based on strategic handshakes of banks and technology companies. It can be seen that the e-wallet market will become a “bloody war” and that development will open the prospect of a comprehensive merger of payment, lending and investment services into a mobile application.
According to the analysts, e-wallets entering the market need to provide the right and complete information users are interested in to attract a huge customer base. In addition, they should link payment gateways with well-known e-commerce sites so users can shop online more conveniently.
E-wallets can also be considered in conjunction with online game providers to create more options for e-wallet users in the feature of buying online scratch cards, online game cards. Because phone cards are prohibited to load online games and users are switching to loading or buying cards through e-wallets.
In this respect, AirPay (e-wallet of Sea Group and Vietnam e-Sports Development Joint Stock Company) also attracts gamers with high discount and preferential rates, which is managed by the largest online game operator in Vietnam. Many gamers have experienced Appota e-wallet, a product of Appota Joint Stock Company, while waiting for permission to use. With the advantage of being a technology company, Appota is also expanding into entertainment and payment.
In the current context, it can be seen that, in order to meet the diverse needs of customers, linking e-wallets with bank cards is an important factor for users to choose which e-wallet is suitable for their current bank card, to avoid having to register another bank card.
When e-wallet products flourish, it will create fierce competition among competitors and may increase noticeably customer’s benefits.
