In 2007, the State Bank began testing intermediary payment services. Nine pioneers in the market received licenses to provide services. By February 2017, the number of service providers had reached 20, each of which targeted specific groups of clients.
Vietnam’s fintech market has attracted many investors, both foreign and domestic. Chinese Gobi Partners invested in OnOnPay, South Korean UTC Investment in VNPTPay, while funds of Exprerian, Kusto Tiger and Unitus Impact and the bank of Sumitomo invested in Mobivi. Meanwhile, Viettel injected money into BankPlus and MobiFone into Vimo.
Pham Thanh Duc, CEO of MoMo, said with the current technology development, Vietnam should have had 20 million mobile payment users and transaction value of $25 million, if referring to the Chinese market.
While banks have mobile banking apps that connect users (with bank accounts) and bank services, MoMo allows clients to do the same thing without bank accounts.
MoMo identifies accounts via user's phone numbers. Users can cash in from MoMo's outlets or through banks. This money is used for money transfer or payment for services and goods.
In Vietnam, it is a $35 billion market with each remittance of less than VND5 million, according to MoMo survey of post offices, a UN report and Smartlink.
MoMo, besides the online transaction system, is also running a physical trading system with 4,000 transaction points in 45 provinces and cities.
Like MoMo, Payoo joined the market very early and has made heavy investment in the transaction network, but unlike MoMo, it focuses on providing payment services for electricity, water and TV bills.
According to Ngo Trung Linh, CEO of VietUnion, the company now has 5,000 transaction points throughout the country. In 2016, total revenue from electricity, water and cable TV bills in large cities was $1 billion, or 10 percent of the market share.
Another difference of Payoo is that it doesn’t focus on mobile apps, because online services are not enough to attract the majority of internet users, and it also provides internet banking and mobile banking services to partners.
Internet service groups have also jumped on the bandwagon.
In late 2016, ZaloPay wallet of Zion, a subsidiary of VNG, was launched, though it had 123pay payment portal. Integrated with the community of 70 million Zalo chat users, ZaloPay appearsto follow the same way as Tencent with WeChat Pay in China.
Two ‘unicorns’ in SE – Garena (game service) and Grab -- both have joined the payment service market. Garena’s Vietnam branch – Vietnam eSports in March 2016 launched TopPay e-wallet. Meanwhile, Grab has tried to attract more users to GrabPay.