Bui Quang Tin from the HCM City Banking University commented that non-cash payment technology still cannot reap fruit in Vietnam, but technology firms and e-wallets remain attractive in the eyes of investors.

Under the Prime Minister’s Decision No 2545, non-cash payment will be used by 100 percent of supermarkets and shopping centers, 70 percent of electricity, water and telecommunication service providers and 50 percent of individuals and households in large cities by 2025. Meanwhile, 70 percent of people aged from 15 will have bank accounts by the end of 2020.

A report showed that there are more than 40 million Vietnamese people using the internet, and nearly 50 million telecom subscribers using smartphones. Non-cash payment has increasedby 30-50 percent each year.

As such, non-cash payment is an extremely large market for Vietnamese and foreign firms in the fields of e-commerce, e-hailing, freight and forwarding, e-wallets and finance and banking to exploit.

The large market and great potential of the non-cash payment sector explain why investors keep pouring money into payment technology firms, though the firms continue taking losses.

The large market and great potential of the non-cash payment sector explain why investors keep pouring money into payment technology firms, though the firms continue taking losses.

An analyst said that before reaping fruit from non-cash payment services, service providers need to spend time to familiarize people with non-cash payment.

“The promotion programs, gifts and discounts offered by e-wallets all aim to help users to experience the new payment method. This is necessary as they are providing a service which requires users to change their habit from using cash to not using cash in making payment,” he said.

He went on to say that businesses’ profit is not the only factor investors consider when deciding whether to invest in businesses. They also consider the prospects of the business fields and the potential of enterprises, cash flow in the market and the state’s policies.

Nguoi Lao Dong quoted an expert as reporting that many foreign investors have urged Vietnamese technology firms to spend money to popularize the firms’ services and improve people’s recognition about the services.

Once the firms successfully change people’s habits and familiarize people with new services, the firms will be able to make a profit.

And in order to familiarize people with new services, e-wallets are spendibg big money on promotion programs.

Khanh An in HCMC said he usually hails taxi and pays with GrabPay by Moca to get discounts. Grab often offers direct discount of VND30,000-50,000 per travel.

When technology firms pour money into marketplaces, invest in intermediary payment service and compete for market share, this brings benefits to customers, allowing customers to use services at best costs. Some commercial banks have begun slashing service fees for customers.

Mai Lan 

E-wallets still competing for slice of the payment pie

Ewallets are still not reporting profits, though they have been making heavy investments in their businesses.

Foreigners make up 90 percent of e-wallet market share

E-wallets are believed to be a very promising business field in Vietnam, but the market is now controlled by foreign firms.