The Fintech market including e-wallets is expected to face fierce competitive pressures in the upcoming time. Now e-wallets are not only under competitive pressure in the industry but also have to face the digital technology of commercial banks directly. The State Bank has issued Decision 2345 on authentication of matching biometric data for high-value e-wallet transactions, this is considered an opportunity and a challenge for e-wallets to compete with technology and high-quality human resources of banks.
Competitive pressure is increasing and the e-wallet market has recorded the first name leaving the race. The once famous e-wallet associated with the super app Grab, Moca, has just announced that it will stop providing services from July 1. Moca’s withdrawal after a long time of spending money on marketing has made many people skeptical about the sustainable effectiveness of the e-wallet industry.
On the other hand, commercial banks show good adaptability to digital transformation. Financial products on digital technology platforms are continuously being launched. Good digital transformation applications help the banking industry narrow the technology boundaries for e-wallets. Today banks can provide most digital utilities similar to e-wallets.
The market penetration phase has "drained money" from industry-leading "giants" such as VNPAY, MoMo, and ZaloPay. Marketing strategies were launched heavily, but more than revenue was needed to cover costs, leading to negative accumulated profits of VND thousands of billions. The State Bank has also passed the judgment: This is "competition to the bottom". More emphasis is needed on service quality, safety, and customer experience for long-term development. The core values a business creates must be the main factor that makes customers trust and stay for a long time. Moca's withdrawal is the clearest proof that sustainable development needs to be a priority especially when e-wallets have to compete with the entire Fintech industry.
Decision 2345/QD-NHH on biometric data authentication will be both an opportunity and a challenge. Adding a safer level of security will help e-wallets improve the quality of service provision and ensure the safety of customers' assets. At the same time, there is a challenge when requiring high-quality human resources and modern services to meet the requirements of digital transformation. To stand firmly on its market share, increasing investment in human resources as well as technology application is a prerequisite.
The overall picture of the e-wallet market in Vietnam is growing but not yet mature. According to the State Bank of Vietnam, by the end of 2023, the country had about 57.31 million e-wallets activated; and 36.23 million of them are active (accounting for 63.23%). The growth potential in the domestic market is still huge, not to mention expanding operations globally. However, the path to profitability still has many challenges. The numbers on the financial statements also reflect this situation. The revenue of e-wallets has been growing steadily over the years, but the profit after tax is bleak.
Reflecting the reality of investment in the marketing race, market share in the e-wallet industry also fluctuates. Accordingly, the VNPAY e-wallet has a huge coverage level due to inheritance from the VNPAY ecosystem with more than 350 thousand payment acceptance points. The multi-utility ecosystem has helped the VNPAY e-wallet increase in coverage. (According to official data published on the company's website, this entity currently has approximately 40 million regular users from banking and VNPAY e-wallet applications).
MoMo is an independent e-wallet with no ecosystem. However, this unicorn start-up has proven attractive to the e-wallet market with up to 31 million people using the service and a network of more than 140 thousand payment acceptance points (according to data published by this start-up in the media). Good implementation of financial management support features, dynamic interface, and new utilities help MoMo gain the majority of the e-wallet market share.
A promising future for growth is when ZaloPay has just launched a new brand identity and announced it reached 14 million users. Enjoying benefits from the ecosystem of parent company VNG, ZaloPay is constantly increasing its coverage.
ShopeePay does not have official user numbers yet, but its popularity is indisputable. Developed from the Shopee ecosystem, accompanied by the strong growth of the e-commerce industry, ShopeePay inherits a large customer file and high transaction frequency.
Not discussing the intermediary payment gateway feature, Payoo's e-wallet operations have little market share. The e-wallets VNPT Pay and Ngan Luong also have a small market share, their functions are somewhat more specific and are not too popular in daily payments. Moca has left but previously remained popular through its association with Grab. It is predicted that after this July, this market share will belong to MoMo and ZaloPay when these two applications are the top payment options for Grab users.
Regarding revenue, e-wallets focusing on marketing such as VNPAY, MoMo, or ShopeePay all have dominant revenue. The revenue of the e-wallet market shows a clear differentiation, mainly due to the needs of service users. Zalo, Vimo, and VNPAY show impressive growth in 2020-2023. Profit after tax is divided by market share, in which the e-wallets with high market share, after-tax profits are always negative or extremely low.
Up to now, more than 51 non-bank organizations have been licensed by the State Bank to operate as payment intermediaries. Market demand is limited but competitors are increasing, each e-wallet must be unique to define boundaries and increase competitive advantage. Vietnam's e-wallet market does this very well. The leading e-wallets in the industry all have specific functions and diverse contributions to the value chain.
VNPAY
VNPAY e-wallet is a member of the VNPAY electronic payment ecosystem. The difference of VNPAY e-wallet is also formed from the diversity of utilities of this ecosystem. VNPAY e-wallet users can easily scan VNPAY QR to pay at more than 350,000 payment acceptance points.
VNPAY e-wallet integrates the VNPAY Taxi application to help users easily book and pay. The VnShop utility available in the VNPAY e-wallet application also helps users expand shopping options and pay conveniently with the e-wallet balance. In addition, the Family Wallet function is popular because, through it, users can easily manage family spending.
VNPAY's partners are relatively large-scale businesses in diverse fields: transportation, consumer services, commercial banking, etc. Network coverage provides optimal user experience.
In 2024, with inherent strengths in technology, VNPAY cooperated with VISA to launch SoftPOS payment technology, which applies NFC wave application to promote transaction quality and speed. The payment ecosystem expansion promises to bring many benefits to the VNPAY e-wallet development.
VNPAY has a good annual revenue growth rate of over 20% from 2020-2022 but is not stable because by 2023 it will only reach 4%. VNPAY has a large market share in Vietnam with revenue reaching tens of trillions. In 2023, record revenue is more than VND 30,000 billion - larger than the total revenue of strong competitors such as MoMo, ShopeePay, and VNPT Pay. Despite the huge revenue, the profit after tax achieved is insignificant, in 2023 the net profit margin is less than 1%. VNPAY is still struggling in marketing even with its high brand awareness.
MoMo
MoMo is an e-wallet suitable for young people with continuous trend updates. Many surveys have shown that MoMo is the most popular application. MoMo's creative team regularly launches dynamic payment trends such as QR codes created by AI, MoMo Lucky Money, Debt Reminder, Money Split, etc.
In July 2023, MoMo updated the VietQR payment scanning feature to adapt to the industry. Worthy of the title of Technology Unicorn, MoMo has launched the Securities Miniapp integrated into the mobile application, helping users trade stocks with just 1 share.
After Moca's withdrawal, MoMo became the most potential partner linking payments with the super application Grab. It is expected that MoMo's market share will continue to expand.
MoMo's financial performance has not progressed well, by the end of 2023 it still reported a loss. MoMo's revenue ranks second after VNPAY, reaching more than VND 9,400 billion in 2023. The growth rate is over 10% per year in the period 2020-2023 but tends to decrease gradually. Although still reporting a loss, the net loss at the end of 2023 decreased by 4 times compared to the previous period. This is a positive signal from the financial situation of this famous e-wallet.
ZaloPay
In July 2023, Zalopay launched the multifunctional Zalopay QR utility according to VietQR standards, affirming that it is adapting to positive changes in Fintech. In 2024, after reaching 14 million users, ZaloPay launched a new brand identity with the orientation of expanding sustainable financial products. Zalopay also continues to cooperate with major partners to open more payment methods via banking applications, international cards, ATM cards, and Apple Pay.
Similar to MoMo, Zalopay also became the leading partner of the super application Grab after Moca withdrew from the market.
Revenue shows positive growth of nearly 40% compared to the previous year. Although the number of wallet users is continuously increasing and the service is very convenient, the recorded revenue is still very modest, not to mention ZaloPay also has a rich source of revenue from selling Game scratch cards.
Even though it is a popular application, profits are still bleak and losses are at the top of the industry. VNG's goal of reducing ZaloPay's 2023 net loss to VND 378 billion was not achieved. ZaloPay's financial report recorded a loss of more than VND 700 billion, although it has narrowed by nearly half compared to 2022.
ShopeePay
ShopeePay is part of the ecosystem of the online shopping super application Shopee. Take advantage of the regular and abundant customer base of Shopee and ShopeeFood.
The year 2023 has witnessed the withdrawal of the food delivery application BEAMIN in Vietnam, the food delivery market share in the upcoming time is ceded to GrabFood and ShopeeFood. Therefore, ShopeePay also benefits in the long term from this event. ShopeePay has always spent heavily to participate in the marketing race.
In 2020-2022, revenue has grown steadily to VND 7,000 billion - ranking 3rd in revenue in the industry. In 2023, revenue will decrease by 15% compared to the previous period. Profit after tax suffered heavy losses, from 2020-2022 all recorded losses, some years up to VND 400 billion. In 2023, the financial situation improved when ShopeePay recorded profits after a long series of losses.
Payoo
Payoo connects with about 100 banks, e-wallets, and a network of more than 25,000 payment acceptance points. The payment affiliate network is constantly expanding, Payoo's strategy minimizes the marketing stage but the operating efficiency is quite positive.
Through the comprehensive payment solution system Payoo POS, Payoo's market share in the field of card payment support is almost exclusive. This helps Payoo gain a regular and sustainable customer base.
Revenue in the 2020-2023 period, although not growing, remains at a balanced level from VND 2,400 to 2,800 billion. Every year, report profits and profits after tax grows steadily over the years. This company earned a profit of more than VND 370 billion in 2023. Payoo is one of the few e-wallets with a profit margin on revenue greater than 10% by 2023 while large competitors are still struggling with marketing costs.
VNPT Pay
Inheriting VNPT's stable customer file in the field of television telecommunications networks. VNPT Pay currently mainly serves customers with telecommunications charges, digital television, and telephone charges payment. In addition, VNPT Pay also links with partners such as Shinhan Finance, and Payoo POS, ... to perform other functions in the application.
VNPT Pay does not focus too much on marketing. Spending less on marketing but VNPT Pay's revenue is still among the top in the industry.
Revenue in the last 2 years has been over VND 5,000 billion, especially VNPT Pay's after-tax profit reached the highest level in the e-wallet market. Over the past 4 years, VNPT Pay's profit margin on revenue reached the highest level of nearly 15% in 2020, then decreased to 9% in 2021, and continued to maintain this ratio in the following years.
Ngan Luong
Ngan Luong still has deposit, transfer, and payment functions like other e-wallets. The difference is that Ngan Luong links with stock and forex exchanges to support customers in depositing and withdrawing money from these exchanges quickly. Recently, Ngan Luong stopped supporting transactions with some forex exchanges due to legal issues.
Although technology unicorns such as MoMo and VNPAY dominate the market share, causing Ngan Luong's market share to decrease significantly, it still shows optimal operating efficiency. Although revenue is modest at VND 500 billion, Ngan Luong, this level has also increased by more than 40% compared to 2020 with a net profit margin of approximately 20%.
Vimo
The cooperation model between Vimo with Alipay and WeChat Pay is considered a specific function of this e-wallet. Accordingly, Vimo has become a cross-border payment intermediary for tourists from China. This timely move helps Vimo bring in huge revenue.
When it was first established, Vimo's revenue was modest due to travel restrictions, but when Vietnam became a leading tourist destination, Vimo recorded a significant increase in revenue.
Vimo's revenue growth rate is astonishing. From 2020-2023, an increase of more than VD 1,300 billion is equivalent to an increase of 220%. Profit after tax grew strongly at 850% in 2020-2023. In 2023, it will record a net profit of more than VND 300 billion, ranking 3rd in the market after Payoo and VNPT Pay.
The financial situation of the e-wallet market further shows that each business needs to swiftly embrace the new era of digital payments. The growth potential of the Fintech industry in Vietnam needs to be better exploited. To stand firm on its market share, adjusting development policies towards long-term goals is a priority. Long-term growth needs to come with a sustainable development strategy. To do this, it is necessary to focus on increasing investment in high-quality human resources. Create optimal technology solutions to improve service quality, and ensure customer trust and asset safety.
Source: Vietdata's 2023 Vietnamese E-wallet Market Report
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