E-walletan intermediary payment tool which allows users transfer money from bank accounts to wallet accounts via the Internet is attracting many young people and office staff in many cities. There are currently 23 types of e-wallet nationwide, provided by 26 intermediary payment companies (fintechs) licensed by the State Bank of Vietnam (SBV). Each type of e-wallet targets a separate customer segment, but the common point is that e-wallets offer free transaction and always give direct money promotion to users.
Momo e-wallet is currently having the most users thanks to the linkage with a large number retail points of sales in the product, particularly the e-commerce websites such as Tiki, Shopee, Dien may Xanh, Nguyen Kim, etc., especially the prepaid music and television services across the globe such as Film, Netflix, Spotify Cliptv, myTV, etc. Users who want to watch a movie or listen to a digital music only need to pay via Momo e-wallet. To attract non-cash payment customers, Momo always reminds its promotional programmes every morning on the applications installed by users on their phones and via emails.
The model of accumulating points of current e-wallets attracts many customers to pay non-cash. For example, customers meeting the daily, weekly and monthly payment revenue targets will be offered for a 25-30 percent discount on movie tickets.
Moca e-wallet has closely linked the point earning with Grab application by offering a direct discount of 50 percent for users order Grab bike, Grab contracts, or Grab delivery. Users of Grab cars making payment via bank accounts or Moca e-wallets also enjoy discount in linked chains of cafes, restaurants, hotels, etc.
In addition to offering non-cash payment for purchasing goods and services in e-commerce, ZaloPay e-wallet currently also offers free interbank money transfer using account number and ATM card number. Accordingly, ZaloPay users only need to transfer money from their bank account to their wallet account in order to transfer money to family members who have bank accounts in rural, mountainous, and remote areas free of charge.
Electronic wallets are (e-wallets) not only attractive to customers for their free payment transactions, money transfer and point earning for regular non-cash payment consumers; the utility of e-wallets is the most important thing that makes people change their payment behaviour when shopping. For example, while a person using bank card for payment at a store has to use Point of Sale (POS) machine, a person suing card for payment via Internet banking has to spend time on entering OTP code to verify cardholder, user making payment via e-wallet only needs to be verified by password or fingerprint on phone device or copies the Quick Response (QR) Code attached to the goods and services in order to complete a non-cash payment transaction. Moreover, e-wallets are very convenient for payment of small value items.
Nguyen Ba Diep, vice Chair of the Board of directors (BOD), co-founder of Momo e-wallet said that “to free all non-cash payment transactions for users of Momo, we collect a fee from the sellers of goods and services, partly for paying banks and partly for covering the investment in technology to operate the e-wallet system. In addition, the fee paid by the sellers to Momo is like a part of the costs to promote sales of retailers. In addition, we link suppliers of goods and services such as transportation, foods, fashion, etc. to create a trade chain to increase sales for retail sale points and reduce the cost prices of goods and services for consumers.”
According to Diep, to make payment via e-wallet, the e-wallet owner must confirm the password on each transaction by a series of numbers or finger print self-created by the wallet owner on the mobile device. When a user opens an e-wallet on a mobile phone or a computer, he/she must have the correct password, and re-confirm the password on each transaction. Thus, it is very safe and secure.
Units with e-wallets can open cash deposit points into users accounts for payment purposes, but are not allowed to mobilise capital from the society.
In Resolution 02/NQ-CP on improving business environment, enhancing national competitiveness in 2019 and orientations to 2021, the government directed the SBV to study and report to the government the plan to deposit cash into e-wallets without using bank payment accounts; and to study and determine the maximum amount of money deposited into e-wallets and monthly transaction value. Commercial banks and intermediary payment units are required to apply QR Code Base standard to ensure compatibility between QR Code-based payment solutions.
A payment expert of the SBV said that the decision to allow direct deposit into e-wallets of the government when being effective will open a great opportunity for the comprehensive financial policy. According to statistics, nearly 70 percent of Vietnamese population are living in rural areas. With high flexibility and low operating costs, the e-wallet re-charge points can be located at grocery, farm tool, fertiliser stores and rural markets to expand the number of e-wallet users. Accordingly, policy managers should manage companies owning e-wallets based on the amount of cash available, the amount of money on the accounts according to the monthly or yearly payment rate. Since then, the payment safety is still ensured and managers do not have to manage both the bank accounts linked with the e-wallets and the companies owning e-wallets like at the present time.
E-wallet owners who open the wallets in rural areas do not have to go too far to find banks for putting money into the e-wallet accounts, and can directly use e-wallets for non-cash payment on e-commerce sites with delivery service. In the coming time, there should be sales points in rural areas with QR Code on goods and services for users to make payments via mobile phones instead of using bank accounts just for withdrawing cash as now.
Particularly, the free transaction costs offered by e-wallets will be an opportunity for rural people to transfer money to their children who study in urban areas and for workers in the domestic and overseas Vietnamese labourers to transfer money quickly to rural areas. This is similar to the M-Pesa e-wallet model of the largest telecommunications network in Kenya which has been very successful in the world in solving a comprehensive financial problem in a poor country. Accordingly, M-Pesa e-wallet has many functions, including payments, deposits, loans, etc.
