According to the statistics of the Payment Department, by the end of October 2019, there were 32 companies licensed by the State Bank of Vietnam (SBV) to provide intermediary payment services, including 29 companies providing electronic wallet services.
Statistics of many organisations also showed that currently five e-wallets were accounting for 90 percent of the intermediary payment market in both quantity and value of transactions, including Payoo, MoMo, AirPay, MoCa, FPT (ranked by order from high to low).
Some e-wallets had a solid promotion for payment customers recently, due to the advantage of the wallet suppliers when consumers transferred money from bank accounts to e-wallet accounts for payment. Not using cash was the process of transferring electronic money. The e-wallet provider collected cash from retailers of goods for consumers, and the bank must pay fees and interest on the money earned by the e-wallet provider.
In 2008, SBV started to license e-wallets, but for the two recent years, some e-wallets had been proliferating. In a recent JP Morgan report, 19 percent of the value of e-commerce transactions in Vietnam was conducted via e-wallets. E-wallets attracted young users as young people often traded goods online, and they often used a mature payment wallet for hunting for promotions.
According to Nghiem Thanh Son, deputy director of SBV Payment Department, Vietnam’s fintech market grew from small businesses, then called for capital from all economic sectors, unlike Chinese fintech companies, which were born from international e-commerce corporations of China.
The steady growth of e-wallets over the past few years, most notably the MoMo e-wallet, had now reached nearly 13 million people downloading applications. Nguyen Ba Diepvice President and Co-Founder of MoMo E-wallet said that from the beginning MoMo had determined to become a financial tool for all Vietnamese people, helping low-income people and small traders access to financial services simply and easily. So far, that mission was still being implemented and had become a driving force to help MoMo overcome many difficulties and challenges to build a large and widespread ecosystem like today.
However, Vietnam’s e-wallet market was fiercely competitive in the market. There were financial technology companies (fintech) investing capital, effort and time for a payment solution, but only after an overnight, the technology might be copied by other companies.
The competition of this industry was the global trend that can be reflected through the lens of the list of the world’s top 100 Financial-Technology Companies (2019 Fintech100Leading Global Fintech Innovators) ranked by the KPMG audit corporation (Netherlands) and H2 Ventures (Australia) financial investment fund. In the list, there were 34 participating companies in 2018, and then the number declined to 27 in 2019, among which intermediary payment companies reduced sharply. The number increased mainly on insurance, asset management, financial lending, and some new industries in the fintech sector.
Currently, Vietnam was completing the legal regulations for fintech in general, the field of intermediaries payment, including e-wallets in particular. Specifically, SBV was seeking comments on the development of a decree on non-cash payments to replace the government’s Decree 101/2012/ND-CP. One of the notable contents was the supplementation of the maximum foreign ownership ratio in the field of intermediaries of 49%, including both direct and indirect ownership.
According to SBV, this regulation aimed to facilitate the attraction of foreign investment but still ensure the active role of domestic enterprises, avoiding the manipulation of foreign investors in this field, as well as providing security and safety for banking and finance activities, national sovereignty in the field of banking and finance.
Besides, because this was a new type of activity and potential market forecast, it was necessary to create a business environment for the sake of the nation and the domestic business community. Therefore, specialised management agencies need to create conditions for local enterprises to seize opportunities and take the initiative in their business activities.
In Indonesia, the legal documents of the Central Bank of Indonesia also stipulated that the ownership ratio of domestic individuals and legal entities accounted for at least 80 percent of the equity. Therefore the foreign ownership ratio did not exceed 20 percent of the capital. Related to foreign ownership in cryptocurrency providers, some limitations appeared, such as for cryptocurrency issuers, foreigners could own up to 49 percent of the shares, calculated either directly or indirectly.
