Hackernoon logoVietnam Fintech in a Flash — Part II: Digital Payment by@longpham91

Vietnam Fintech in a Flash — Part II: Digital Payment

Long “Leo” Pham Hacker Noon profile picture

@longpham91Long “Leo” Pham

NOTE: If you haven’t read Part I, please read it up here: Part I: Grasping Vietnam’s Financial Technology Landscape.

Currently, the level of fintech penetration in daily use remains low. A survey by World Bank reviewed that the number of non-cash transactions over population was merely 4.9%, comparing to 59.7% in Thailand and 89% in Malaysia. Dao Minh Tuan, vice chairman of Vietcombank and Chairman of the Vietnam Bankcard Association, stated that roughly 90% of Vietnamese daily spendings are cash-based. Consequently, the payment landscape in Vietnam attracts a lot of fintechs, with 47% of local fintechs serving this segment, per the EY’s ASEAN Fintech Census 2018.

Current Scenario

The growth in Vietnam’s digital payment sector has been remarkable. According to Statista, the total transaction value in this segment amounts to US$6,4M in 2018, grossing 22.1% year-over-year growth rate, of which roughly 97.6% come from e-Commerce (US$6,2M). This number is expected to grow to US$11,1M by 2022, at the annual growth rate of 14.9% between 2018–2022.

Electronic wallet services also flourish. Per statistics from the State Bank of Vietnam, the value of e-wallet transactions in 2017 reached more than VND53.1 trillion, increasing 64% year-over-year. Out of the 27 licensed payment services in Vietnam, 20 of them offer digital wallets. These e-wallets allow electronic payment of bills such as electricity, water, Internet and TV, purchases of lifestyle services such as movie tickets, airfares, hotel booking, etc, as well as money transfer and remittance via QR code and connection with bank accounts for cash withdrawals or recharge.

Non-bank organizations holding payment licensed issued by the State Bank of Vietnam. Source: Fintech News Singapore.

Banks also quickly catch up with this rising trend of digital payment. In October 2018, the SBV approved requests from VIB, HDBank, ACB, and PVComBank to operate in the e-wallet business. Other banks, especially the foreign-owned ones, opt to collaborate with local e-wallet services to expand into this segment. For example, Standard Chartered Bank has partnered with MoMo to allow corporate clients to make payments directly into their beneficiaries’ MoMo mobile wallet. (Standard Chartered also led in MoMo’s Series B fundraising round of $28M alongside Goldman Sachs.)

Key players

Among the current players in Digital Payment segment, there are a number of leaders, including:


Founded in 2007, MoMo is a fintech startup that offers a mobile, electronic wallet and payment application for mobile devices. Its products help customers in Vietnam make nationwide cash transfers and remittances, pay bills, settle personal loans, and purchase services such as software license, hotel booking, airfares, movie tickets, and the likes. MoMo has over 10,000 vendors on the system and partners with 24 local banks and credit card providers.

MoMo was the sole Vietnamese fintech featured in both the Fintech 100 report by H2 Ventures & KPMG and the 100 Leading Fintech Companies listing in a report by the International Finance Corporation (IFC), CreditEase and Stanford University. According to the Fintech 100 report, MoMo grosses over 8 million customers and a growth rate of 15% in monthly transaction volume and user base.

In January 2019, Momo announced its Series C funding round, led by Warburg Pincus. This funding round, according to its CEO, Pham Thanh Duc, has been “game-changing”, whereas Nguyen Manh Tuong, the company’s Executive Vice Chairman, lauded Vietnam’s progress into the fintech era, and will require “a robust and inclusive financial services ecosystem” to realize that vision.


Payoo, owned by VietUnion, an intermediary payment service provider under the license of the SBV, is an e-wallet solution for online transactions providing services to both personal and business customers. Payoo provides different channels of payment and re-charge for customer’s accounts, including online (web/mobile) and physical (at the shops/stores…). This one-stop-for-all model also enables Payoo to readily connect and provide payment services for real estate developers and manager, said Nishikawa Shinichiro, vice chairman of Viet Union (Payoo’s parent company).

Currently, it is partnered with over 37 domestic and foreign licensed banks, 35 Vietnamese service providers and over 180 e-commerce websites across the nation. According to Forbes Vietnam, at the end of Q3–2018, Payoo has over 8,000 payment devices at 10,000 vendors, providing 200 different services. Payoo grossed approximately 4,000 billion VND of gross merchandising volume (GMV) in 2017 and is estimated to reach 5,000 billion VND of GMV this year.


ZaloPay, owned and developed by VNG, is an e-wallet application associated with Zalo, Vietnam’s largest social messaging platform with over 100 million users. This link also enables ZaloPay to tap into a vast network of active users and address their payment needs. Aside from providing the similar services that other e-wallets also offer, ZaloPay also allows in-app payment for Zalo app as well as “lucky money” remittance service that drew over 1.3 million transactions within one month of Lunar New Year holiday.

In the near future, ZaloPay sets out its goal to replace POS technology via its QR-based payment system. Thong Pham, ZaloPay’s marketing director, said at an event in February 2018 that the payment platform aims to replace POS system completely, by leveraging the convenience of QR technology over other more limited methods such as SMS payment, POS, or near-field contact (NFC).


Moca is another Vietnamese e-wallet service that provides a number of services without having to use your physical card. GrabPay is the payment platform by Grab, Southeast Asia’s top ride-sharing service with over 36 million users in 8 countries.

In September 2018, Grab announced that it had made a strategic investment in Moca and would be launching a new version of GrabPay for Vietnam. On October 1st, 2018, GrabPay relaunched in Vietnam under the new brand “GrabPay by Moca”. This partnership, according to Grab, would allow GrabPay users to access Moca’s services such as bill payment, money transfers, and retail purchasing.

Looking at the future, Grab wants to bring GrabPay by Moca beyond current use cases. At a meeting with Vietnam’s Deputy Prime Minister Vuong Dinh Hue on October 2nd, 2018, Grab’s co-founder and CEO Anthony Tan suggested new changes to current e-wallet regulations that include bank-independent e-wallet service, e-KYC, and public sector digital payment. Grab also announced that it will start providing overseas remittance on GrabPay in early 2019.

The Future in a Flash

In March 2018, Prime Minister Nguyen Xuan Phuc approved a government plan that looks to boost up non-cash public service payments. By 2020, 80% of tax payment transactions in central-level and provincial-level cities will be implemented via banks, while all State treasuries will have cashless payment devices. Non-cash payments will be accepted by 70% of power companies, 70% of water companies, 100% of universities and colleges and 50% of hospitals in major cities.

This initiative will create increasing demands for digital payment solutions. On the other hand, banks and financial services are quickly catching up to the trend, posing fiercer competitions to existing players in the sector. Market-wise, the local cash-based payment preference will not change quickly, and e-wallet companies need to continuously improve its products and services to keep up with market demands.

Up next: Part III: Innovated Banking (coming soon)


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