ex. Game, Music, Video, Photography

Vietnam conglomerates race to invest in payment intermediaries

Vietnam’s trade groups are investing in payment intermediaries to support their commercial ecosystems, and the competition is set to become fierce.

Ngày đăng: 13 tháng 9, 2021
Cập nhật: 21 tháng 1, 2023
Lượt xem: 306586576
Nguồn: vnexpress

Vingroup’s loyalty program VinID last week completed the acquisition of shares in People Care JSC, the company that created digital wallet app MonPay. Right before the deal was completed, VinID had replaced People Care’s entire board of directors with their own personnel.

At the end of 2018, executives of ride-hailing firm Grab Vietnam were appointed to the board of Moca – a Fintech-based payment intermediary. Operations relating to the company’s platform to process payment for rides, GrabPay, was subsequently shifted to Moca, to become GrabPay by Moca.

Moca and MonPay are just two of several cases of Fintech firms receiving investments from large partners. The market for payment platforms and e-wallets, which exploded in 2015 and 2016, are now being reshaped with the emergence of investors with significant financial resources backing these platforms.

According to analysts, these developments may lead the market into a new phase with harsher competition.

"The participation of these large players is very encouraging as they only invest when there is potential and the customer base is growing," said Nguyen Ba Diep, deputy chairman of Momo, one of Vietnam’s first e-wallet payment intermediaries.

By the end of 2018, there were 4.2 million e-wallets linked to bank accounts, with total transaction value of the whole year reaching VND91 trillion ($3.9 billion), but these numbers are still modest compared to actual market potential, he said.

Heavy losses

However, most digital wallets in the market are making losses. Earlier this year, Pham Tien Dung, head of the State Bank of Vietnam's payment department, said that only 20 percent of intermediaries in the market were making profits from transactions, and that the rest of the market was "unstable".

Losses with startups in general and Fintech firms in particular are expected because these units often choose to sacrifice profits in exchange for acquiring greater market share.

In early 2016, Zion JSC, an intermediary of Vietnamese online gaming and messaging firm VNG Corp, was granted a payment intermediary license, and debuted its ZaloPay shortly after. For two years after ZaloPay was launched, the company experienced mounting losses.

According to VNG’s annual financial reports, Zion lost VND21 billion ($900,000) in 2017, and this rose six times to VND133 billion ($5.7 million) in 2018.

According to its 2017 and 2018 financial statements, Momo’s net cash flow from its intermediary payment app was several hundred billion dong in the negative each year (VND100 billion = $4.3 million), with most of its losses offset by profits from other financial activities.

Integration into commercial ecosystems

The market situation has seen new entrants deciding to join the market through mergers and acquisitions (M&A) deals.

For large commercial groups aiming to develop an ecosystem of services, owning a payment platform is a "must-do sooner or later," analysts say. The latest investments in the payment intermediaries sector have mostly come from corporations with their own ecosystems.

For instance, Grab, which acquired Moca last year, has expanded its business to many services, including shipping and food delivery, after debuting with its ride-hailing app in 2014.

VinID is Vingroup’s loyalty program, which allows customers to accumulate points from goods and services bought from Vingroup’s whole ecosystem, which includes real estate, education and shopping.

SEA (formerly Garena), a gaming company, invested $64 million in food & beverage sharing platform named Foody in 2017, then paid a total of $50 million to acquire a majority stake in VNPay as well as an undisclosed stake in a local logistics firm.

SEA group also has its own leading Southeast Asian gaming platform Garena, as well as Shoppee, a popular e-commerce app in Vietnam.

According to analysts, another reason for participation from "giants" are that the market is highly fragmented and there is no single unit strong enough to attract the majority of customers to its own platform.

In fact, it appears that each e-wallet tries to focus on its own niche segment. Buzzmetrics reports that 60 percent of customers go to Momo because of promotions, 70 percent use Viettelpay for transfers, and 100 percent go to Airpay for ordering goods.

As a result, major players with financial capacity to invest see this as an opportunity to dominate the market. Competition is expected to become fierce.

"To develop electronic payments, each unit must have a distinct strength and ecosystem, in which customers will choose the best and most suitable service," said Diep, deputy chairman of Momo, predicting that, eventually, the market will only be large enough for two or three players.

Tin tức liên quan

world 22/03/2021

Japan's emperor prays for peace in first abdication in 200 years

world | 51006607

Japanese Emperor Akihito, in his final remarks as his three-decade reign drew to a close on Tuesday, thanked the people for their support and expressed hope for a peaceful future.

Saigon’s Captain Sidewalk faces death threats as cleanup campaign widens
news 25/09/2021

Saigon’s Captain Sidewalk faces death threats as cleanup campaign widens

news | 338536573

It was just a matter of time before someone snapped over the radical cleanup campaign in District 1.

 Multi-level marketing firms’ revenues rise despite fewer participants
business 22/03/2021

Multi-level marketing firms’ revenues rise despite fewer participants

industries | 52376612

The number of participants in multi-level marketing declined by 12 percent in 2019 though sales rose by 16 percent.

Vietnam beat Jordan on penalty shootout, enter Asian Cup quarterfinals
football 23/09/2021

Vietnam beat Jordan on penalty shootout, enter Asian Cup quarterfinals

football | 336026572

Dread-stricken families recount migration hardships
news 13/09/2021

Dread-stricken families recount migration hardships

news | 307486552

24 Vietnamese families are dreading their offspring might be among the 39 people found dead in a refrigerated truck in the U.K. after investing tens of thousands of U.S. dollars hoping for a better future.

Pork prices hit 5-year high
business 11/09/2021

Pork prices hit 5-year high

industries | 295216572

Pork prices in Vietnam have hit a 5-year high at VND71,000 ($3) with domestic production hurt by the African swine fever epidemic.

PM orders shake up at scandal-hit Ministry of Industry and Trade
news 16/09/2021

PM orders shake up at scandal-hit Ministry of Industry and Trade

news | 318286557

Vietnam is restructuring unwieldy government bodies in a bid to maintain economic momentum and reduce administrative burden.

  Indonesia media criticize Vietnam coach for alleged unusual press conference
sports 07/01/2023

Indonesia media criticize Vietnam coach for alleged unusual press conference

football | 447016550

Newspapers in Indonesia have criticized Vietnam Coach Park Hang-seo for leaving the pre-match press conference early on Thursday and for failing to take more questions from the media.

business 12/09/2021

Vietnam's budget airline VietJet seeks overseas listing

business | 299486560

The plan comes amid the government’s easing of rules to potentially allow more foreign investment in the aviation market.

Link Tài Trợ - Sponsored Links

Công Thức Vật Lý