The rise of E-

Wallet in
Vietnam
HCM, May 2021
Table of contents
1 What is an E-Wallet 3
2 E-Wallet market – Huge potential for growth 4
3 Vietnam E-Wallet Market is booming 5
4 Vietnam’s crowded E-Wallet market 6
6 Regulations on E-wallets in Vietnam 9
7 Top E-wallet players in Asia 10
8 Challenges for the growth of the E-wallet in Vietnam 11

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 What is an E-Wallet
Definition Similar stored value instruments

Gift card/Certificate
Debit/ATM card Type of stored value card loaded
Plastic payment card that can be with funds for future
used instead of cash when making discretionary use. Only it
purchases. It is similar to a credit contains a specific amount of
card, but unlike a credit card, the money. Once this sum is spent
money is immediately transferred down, the card can no longer be
directly from the cardholder's used. Gift cards also have
E-wallet is a type of electronic card bank account to pay for the expiration dates, which are often
which is used for transactions made transaction. Open or semi-close much shorter than that of
online through a computer or a loop, virtual or physical, usually prepaid cards. Open or close
smartphone. Its utility is same as a KYC or low KYC. loop, virtual or physical,
credit or debit card. An E-wallet needs reloadable or not, usually no
to be linked with the individual’s bank KYC.
account to make payments. Loyalty Card
Marketing strategy designed to
encourage customers to continue Prepaid card
to shop at or use the services of a Can be loaded with funds that
business associated with the aren’t linked to a bank account.
program. Today, such programs The user can spend up to the
cover most types of commerce, amount of money on the card.
each having varying features and Open or close loop, virtual or
rewards schemes, including in physical, reloadable or not,
banking, entertainment, usually no or low KYC.
hospitality, retailing and travel.
Close loop, virtual or physical, no
KYC.
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 E-Wallet market – Huge potential for growth
SEA Digital Financial Services are on a healthy trajectory The rise of E-wallet in Vietnam
SEA Digital Payment Gross Transaction Value While 60% of Vietnam's population (15 and above) is
(GTV) (US $B) unbanked, much higher than other SEA countries, E-wallet
15% penetration in Vietnam is 11%, just behind Singapore and
Indonesia.
Accelerated growth for Digital 60
3% 1200 Payments: With the boost from Portion of population (15 and above) (%)
Covid-19, which are turning into 39
lasting payment habits, SEA 2025
620 17 15
600 GTV estimates have been revised 10
to US$ 1200bil 2 11
10 11 16
Singapore Malaysia Thailand Indonesia Vietnam
2019 2020 2025

Gross Transaction Value (GTV) (US $B) Of the 41 licenses granted for the payment service, 35
E-Wallet 1% 3% 6% companies provide E-wallet services.
A2A 18% 18% Decline of cash, adoption of e-
21%
wallets: E-wallet are rising in uptake, primarily among affluent, urban
Cards 21% 20%
24%  Cash as payment method fell populations.
from 48% of transactions to Payment split 2019 Forecasted payment split 2023
Cash 37% in 2020
60% 59% Others; 5% Others; 4%
49%  In comparison, E-wallet rose E-wallet;
E-wallet;
15%
from 18% to 25% Bank 22%
Bank
transfer;
transfer;
23%
2019 2020 2025 30%

Card; 31%
E-Wallet is expected to see a 12-fold increase in total transaction value in 2025 Card; 29%
Cash; 26% Cash; 15%

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Vietnam E-Wallet Market is booming
Vietnam has a pretty dense E-Wallet market Top 3 players control close to 90% of the market

15
No. of Users 20 mil ~ 5.5 mil 6 mil (*)

Linked banks 25 25 19

20  High number of users  Link to Grab  More than 100

 High number of ecosystem million users
merchants who worldwide from
Competitive
accepted payments VNG ecosystem
advantage
 Many viral programs like (Zalo, VNG game,
lucky money, mobile Zing, Tiki,..)
game,…
35
Number of
transactions per 2.0 2.2 1.6
day
Value per
VND 260,000 VND 230,000 VND 276,000
transaction
In Vietnam, the e-wallet market is quite active when not only foreign suppliers but domestic suppliers Value of payment
also rush into the race. Telecom enterprises such as Vinaphone, Viettel, VTC, FPT launched VNPT Pay, VND 520,000 VND 506,000 VND 441,600
per day
ViettelPay, VTCPay and Pay FPT, respectively. Even Zalo which provides messaging service also made
their move by launching ZaloPay. Domestic banks participated with Bank Plus products (cooperation Continue to use
between Viettel and MBBank), Timo (VPBank), MEED (Maritime Bank), Vi Viet (LienVietPostbank), etc. without 89% 95% 84%
And lastly, financial technology companies joined the game with MoMo, VNPayQR, NextPay, Payoo, promotion (%)
1Pay, Bao Kim, Vimo, Mobivi, eDong, eMonkey, Pay365, TopPay, etc. * Updated till end of 2019

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Vietnam’s crowded E-Wallet market
No. E-Wallet General info Strategy of funding Key strategy No. of users
1 Momo CEO: Pham Duc - Jan 2021: Series A: $5.8M - Goldman - Promote connections with e-commerce companies - 23mil+
Thanh Sachs - Next new direction, users will use Momo to go to the market, drink, go out, - > 120k payment acceptance
- Jan 2019: Series B: $28M - Standard etc points
Chartered Bank - Besides improving products, Momo will invest in infrastructure new
- Mar 2016: Series C: $100M - Warburg technologies such as artificial intelligence (AI) to analyze customer behavior
Pincus data and automate jobs to satisfy customers.
- Jan 2013: Series D: $100M - Goodwater
Capital, Warburg Pincus
2 Zalo Pay CEO: Truong Cam - 60% from VNG - Utilize the Zalo ecosystem to develop payment services - Intergrated with more than
Thanh - 40% from no-infor partner - focus on customer base in remote areas with little opportunity to access 70mil users from Zalo
financial products and services.
3 Moca CEO: Tran Thanh - Sep 2018: Corporate Round: Grab - Utilize the Grab ecosystem to develop users bases 2.5mil
Nam - Feb 2017: Seed Round: $200K - Leading in terms of user usage frequency
- Moca aims to build super apps on smartphones, seeking to work across
borders.
4 VNPay CEO: Le Tanh Jul 2019: Private Equity Round: $300M: - Develop QR Payment: apply AI technology to create smart consumption - >100k payment acceptance
GIC, SofBankVision Fund habits, prevent risks,.. points
- Integrated VNPay QR Payment on mobile banking app of banks - VNPAY-QR: >30 online bankning
- Develop Mpos services app
- VNPAY will expand and promote payment development in many fields, - > 15mil monthly active users
especially payments for small businesses that have not previously been able to
access new payment forms.
5 Airpay CEO: Tran Tuan Anh - Tencent owned 30% through investment - In the Vietnamese market's long-term development strategy, the AirPay e-
in Vietnam Esport (Airpay owner) wallet will meet all the daily payment needs of customers and make shopping
- 70%: no info investors more accessible and more convenient for all users. Besides bringing
convenience in payment operations, many attractive promotions, and
discounts, e-wallets constantly improve to increase customer experience.

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Vietnam’s crowded E-Wallet market
No. E-Wallet General info Strategy of funding Key strategy No. of users
6 Viettel Pay CEO: Pham Trung - Owner: Viettel Group - ViettelPay is a personal finance product for everyone, including rural, remote, > 9mil users (2020 update)
Kien and isolated areas.
- Develop Digital Banking services: launch lending service in 2020
7 Payoo CEO: Ngo Trung Linh - Owner: VietUnion - Building an electronic payment platform to open and serve multi-channel, - >40 linked banks
multi-service, towards creating connection points for many related partners. - > 300 corporate partners
- Develop bill payments customer base: > 350 invoices forms & >100k bil total - > 120k acceptance payment
transactions value/ year points
8 Wepay CEO: Phung Tuan - Owner: Gojek - Utilize Gojek ecosystem to develop cashless payment
Duc (Gojek)
9 SmartPay CEO: Marek Eugene - Owner: SmartNet The key strategy of SmartPay is to develop a wide network of small merchants - 1.5 mil individual users
Forysiak and retailers in remote areas - 400k micro merchant
Chairman
SmartNet: Nguyen
Thi Trong Phu
10 VTCPay CEO: NGuyen Thanh - Owner: VTCIntercom - Provide both e-wallet and payment gateway services: - > 2000 linked corporate
Hung - Focus on bill payments, phone recharge card, game cards - 37 domestic banks
11 BankPlus CEO Viettel Viettel Telecom - building an ecosystem, a more complete technology environment while still - 800 viettel stores
Telecom: Nguyen being customer-centric - 7500 money transfer points
Viet Dung - BankPlus of Viettel does not need a SmartPhone and does not need an
Internet environment, just mobile network. Moreover, using BankPlus 2.0,
customers do not need a bank account but still have an e-wallet
12 True Money CEO: Do Tuan Minh CP Group - Utilize large ecosystem of CP group to provide diversity services to customers > 5mil users

13 Baokim.vn CEO: Nguyen Duc VNP Group + MITSUI - Payment intermediaries/ e-wallet/ collection services - >5.7 mil users
Trung - Focus on improve infrastructures. - 1.4 mil trans/ month
14 Ngan luong Nguyen Hoa Binh NextTech - Focus on providng services to merchants: online payment received,
JBC installement payment, cash collection, pay on behalf, Tokenization, MPOS,
Payment link
- Services for customers: Game card, mobile card

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Vietnam’s crowded E-Wallet market
No. E-Wallet General info Strategy of funding Key strategy No. of users
15 Vimo Nguyen Hoa Binh - NextTech - M&A with mPOS
- Plan to raise 30mil USD for NextPay - Focus on building the largest payment acceptance network in Vietnam to
(M&A Vimo & mPOS) boost cashless payment in tradditional retails
16 Mobivi Bruce Allan Butler - Movi is on a mission to be one of the leaders in financial services space with
our responsible & affordable lending
- We have created customized financial products for this segment, which they
can avail easily through multiple channels, which again are designed for their
convenience. We have created special products for customers having difficult
times due to the pandemic.
17 Edong ECPay - Vietnam electricity - To help Vietnamese people pay electricity bills online
18 Mpay Nguyen Quang Onepay By launching mPAYvn application, OnePAY wants to diversify payment
Minh solutions, bringing the best payment experiences to Vietnamese consumers.
19 Viviet Lien Viet Post Bank - boost cashless/ electronic payment gateway >2.7 mil users
- online saving account, online money transfer, 24/7 online lending services for > 35k payment acceptance
all classes with safty & utilities points
> 40 linked banks

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Regulations on digital paymen in Vietnam
Regulations on E-wallets in Vietnam
Circular no. 23/2019/TT-NHNN

Transaction amount 100mil VND/ month

Services - Prohibit providing lending services for e-wallet customers
- No paying interest on e-wallet balance or any actions leading to the increase value of money in e-wallet
KYC - Customers need to link e-wallet account with their Debit/ Credit cards before using e-wallet services
- Customers need to provide valid ID or birth certificate (<14 years old people) to verify e-wallet account
Transactions - Only transactions between the same e-wallet service provider could be performed
SBV - issue/ withdraw licenses
- e-wallet service providers must provide tools for the State Bank to supervise the operating of e-wallet services

Regulations on e–money in Vietnam

Circular no. 101/2012/NĐ-CP
80/2016/NĐ-CP
Transaction amount Transaction value >20mil VND has to used by eMoney to claim VAT
Services - Payment service providers and payment intermediary service providers have to set a fixed price and public the of fees for their services.

KYC - Customers: >15 years old to open payment account. If customers <15 years old, they need to have guardians to open accounts

Transactions - Cashless payment instruments include: checks, payment orders, collection orders, bank cards, and other payment method according SBV's
SBV - Issue or withdraw licenses of payment services providers
- Manage & supervise international cooperation activities

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Top E-wallet players in Asia

Country China China Singapore

Year of launch 2009 2013 2016

No. of users 1.2 billion 800 million > 100 million users
(last updated 1 Apr 2020) (Q4 2019)

Highlights - 1st market share in China e-payment - 2nd market share in China e-payment - 77% of all transactions on Grab’s
market: 54.7% market: 37% platform were conducted via GrabPay
- 80 million merchants - 1 billion transactions per day - Cashless usage on GrabPay is 1.3
- 900 million users in China times higher numbers in the city-
- 300 million users outside of China stage.
Competitive advantages - Alipay’s most competitive advantage - WeChat’s traffic and social advantage - Grab ecosystems
was that it had solved the trust issue - Thanks to red packets, WeChat Pay - Utilize 73% unbanked population in
during online transaction at the time was able to kickstart its user base in a the SEA region
when e-commerce still underdeveloped short period of time. - Use technology to address the
in China - In 2015, China’s online-to-offline challenges of cash in the region,
- Alipay has been constantly innovating (O2O) market exploded: ride-hailing, providing solutions for micro-
the payment to create more value and food delivery, movie-ticket entrepreneurs and small businesses.
convenience. The QR code payment purchasing. WeChat Pay utilized this
offered by Alipay has facilitated the trend to boost their payment service.
millions of business from luxury malls
to street shops in China.

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Challenges for the growth of the E-wallet in Vietnam
Challenges of the E-wallet providers in Vietnam’s market
What E-wallets are becoming
Vietnamese still prefer cash payment
Although many e-wallets companies have repeatedly used promotions to attract users, a
majority of people ended up using e-wallets just because of the discount; thus, they
have less loyalty to the brands. Up to 47% of users said that they were willing to try out
new brands, only 7% said they would be loyal to the brand they were using.

E-wallet providers are still pouring their money without making any
profit
By the end of 2018, MoMo e-wallet had accumulated losses of nearly 1,000 billion VND
(~43 million USD); ZaloPay also reported a loss of 177 billion VND (~7.6 million USD),
almost ten times the loss of the previous year despite the fact that both ZaloPay and
Momo are among the top e-wallets with the most users today.
What banks need to become

Lack of full and official legal framework for E-wallet payment

No sanctions or laws are regulating the legality of e-wallets and the risks and ensuring
the safety of users' assets whenever there is a dispute. Therefore, online consumer
protection laws need to be stricter and enforced to encourage consumers to pay more
via e-wallets. Regulator seems to protect the banks by requesting to link a bank account
to the E-wallet.

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Challenges for the growth of the E-wallet in Vietnam
Challenges of the E-wallet providers in Vietnam’s market Mobile Money PSD2 Open Banking
$$$$
Too often close loop with limited
merchant network MNOs have more users, Secure way to give
Most of the E-Wallet providers less operating costs (i.e. providers access to your
focus on the users rather than SMS are free), larger
X/Y IT financial information. It
merchants and try to keep teams. They are cloud opens the way to new
their users captive via close ready with deep pockets products and services that
loop schemes. Very few and understand how to could help customers and
initiatives towards Unified monetize data. small to medium-sized
Payment Rails. businesses get a better
X/Y
No fractional reserve: 1 to 1 ratio deal.
SBV requires E-Wallet providers to maintain at a bank
of their choice the entire float thus reducing their
leverage compared to banks. They can’t earn interest,
use or loan the funds, even if there is breakage.

Central Bank Digital Currencies

Uses a blockchain-based token to represent the digital form of a fiat currency of a "Give me control of a nation's
particular nation (or region). A CBDC is centralized; it is issued and regulated by the
competent monetary authority of the country. CBs want to control their money supply. money and I care not who
makes it's laws"

Mayer Amschel Bauer Rothschild

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Thank-you

JP Gagnon
Deputy Chief Executive Officer

Tel: +855 96 5 777 777

Email: jp.gagnon@sathapana.com.kh ; Website: www.sathapana.com.kh
Sathapana Tower, No. 63, Preah Norodom Blvd., Sangkat Phsar Thmei 3, Khan Daun Penh, Phnom Penh

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