Vietnamese e-wallets charm investors
Hefty sums found their way to Vietnamese e-wallets from diverse partners during the year, turning the segment into one of the investment hotspots.
|E-wallets bring convenience to payment services|
Since late 2019, vast money flows have made its way to Vietnam, mainly into e-wallets via mergers and acquisitions deals.
Vietnamese online gaming giant VNG Corporation has reduced its stake in wholly-owned e-wallet ZaloPay to 60 per cent by issuing shares to other investors.
The reduction of its shareholdings in Zion JSC, the owner of ZaloPay, happened in the third quarter of 2019, VNG said in its 2019 financial statement released in February.
Zion had raised its charter capital from VND367.4 billion ($15.9 million) to VND612.3 billion ($26.6 million) through an issuance of shares to other investors whose names were not disclosed.
VNG has earned more than VND464 billion ($20.17 million) from the deal.
ZaloPay had later on scaled up its charter capital to VND900 billion ($39.13 million).
Last December, China’s Ant Financial, the fintech affiliate of e-commerce giant Alibaba, has quietly acquired a sizeable stake in Vietnamese e-wallet eMonkey of small Vietnames fintech firm M-Pay Trade.
Although the deal value has not been disclosed, it was reported that after the deal the foreign partner “would have significant influence and provide technical expertise to the e-wallet.”
Earlier, VNPAY, a leading Vietnamese digital payments firm, closed a deal with Japan-based SoftBank Vision Fund and Singapore-based sovereign fund GIC. Accordingly, SoftBank and GIC poured nearly $300 million into VNPay, turning this fintech firm into a market leader who currently provides e-payment services to more than 40 banks, five telecom firms, and more than 20,000 local firms.
Another major deal last year involved VinID JSC which is 80 per cent owned by Vingroup – the leading private conglomerate in Vietnam – which had completed procedures to acquire e-wallet MonPay. The deal value has not been disclosed.
Last year's line-up of deals continues, including the merger of e-wallets Vimo and mPOS (both under the management of tech startup NextTech Group), or e-wallet Momo receiving a very large, undisclosed investment from US equity firm Warburg Pincus, just to name a few.
Economic experts forecast that the Vietnamese e-wallet market would be a mainstay on investors’ radar this year due to the government’s strong commitment to spurring non-cash payments and e-wallets’ continuous tempting promotion programmes which help draw in users by the droves.
The State Bank of Vietnam’s figures show that by mid-November 2019, 32 companies were licensed to provide intermediary payment services in Vietnam. Their numbers included more than 20 e-wallet businesses.
According to the freshly-released report titled “FinTech in ASEAN: From Start-up to Scale-up” by United Overseas Bank (UOB), PwC, and the Singapore FinTech Association (SFA), investment in Vietnamese fintech accounts for 36 per cent of total investment flowing into this field in the whole ASEAN region in 2019, attesting to the charm of Vietnamese fintech firms in the eyes of foreign investors.
A recent report by J.P.Morgan also shows that 19 per cent of e-commerce transaction value in Vietnam takes place via e-wallets. This figure equals that of cash payments, and is behind card payments that take the lead with 34 per cent and bank transfer (22 per cent). VIR
Investment funds had poured $410 million into Vietnam’s fintechs as of the end of September 2019, according to a report of PricewaterhouseCoopers, United Overseas Bank and Singaporean Fintech Association.
An economics expert has said e-wallet firms are breaking out promotions to try and win large chunks of the high potential market in Vietnam.