E Wallet Vietnam Fintech Market Analysis and Opportunities

The e-wallet market in Vietnam is growing rapidly, with a projected value of $2.5 billion by 2025. This is due in part to the increasing demand for digital payments and the government's efforts to promote financial inclusion.

According to the article, the e-wallet market in Vietnam is expected to reach a penetration rate of 30% by 2025, up from just 10% in 2020. This is a significant increase, driven by the adoption of mobile payments and the expansion of e-wallet services.

One of the key drivers of the e-wallet market in Vietnam is the growing middle class, which is increasingly using digital payments for everyday transactions. As a result, e-wallet companies are expanding their services to meet the needs of this growing market.

The Vietnamese government has also played a key role in promoting the e-wallet market, with initiatives such as the National Payment Corporation of Vietnam (NAPAS) aiming to increase the use of digital payments.

The future of e-wallets in Vietnam looks bright, with 67% of the population using the internet and a growing economy reaching $9 billion in 2018. Internet usage has reached 67% and the internet economy has reached US$9 billion in 2018, accounting for 3.8% GDP.

Smartphone penetration is also on the rise, with 85% of adults aged 15+ using a smartphone. This is a significant opportunity for e-wallets to tap into, especially since online shopping is exploding, with 60% of consumers shopping online in HCMC and Hanoi in Q1 2019.

However, there are still barriers to adoption, including a highly organized cash on delivery system, which is convenient for consumers but hinders e-payment growth. People are also hesitant to trust financial institutions with their data privacy and transaction security.

Despite these challenges, e-wallets have already shown early successes in Vietnam. Mobile e-wallets are dependent on promotions to drive transaction volume, but users appreciate the simple process and rewards offered by these services. In fact, mobile e-wallets have the highest net promoter score for recommendations, compared to other payment methods.

Here are some key statistics on mobile e-wallet adoption in Vietnam:

These statistics demonstrate the potential for e-wallets to become a dominant payment method in Vietnam, but it will require continued innovation and investment to overcome the remaining barriers to adoption.

Decree 52 has introduced regulations on e-money, which is defined as the value of Vietnamese Dong (VND) stored digitally, based on the amount of money prepaid by customers to banks, foreign bank branches, and payment intermediary service providers.

Vietnam has over 40 e-wallet providers alongside e-payment services from commercial banks, with around 36 million active e-wallets reported by FiinGroup as of April 2024.

Decree 52 stipulates that e-money can be stored through e-wallets and prepaid cards, and banks and foreign bank branches can issue and provide e-wallets and prepaid cards.

Payment intermediary service providers offering e-wallet services must ensure that the total balance in all bank accounts supporting payments for their e-wallets is not less than the total balance of all e-wallets issued to customers.

These providers may only offer services to e-wallets linked to customers' payment accounts or debit cards.

Here are some key regulations on e-money storage:

Decree 52 aims to prevent and eliminate illegal payment methods issued by unauthorized organizations, and support competent agencies in combating related legal violations.

Mobile e-wallets have been a huge success in Vietnam, with 7 in 10 users topping up their wallets directly from their bank account with an average of 1,000,000VND. Momo is the most popular mobile e-wallet, with 9 in 10 consumers mentioning it first when asked to recall mobile e-wallet brands.

Momo achieves the highest use share, with three quarters of mobile e-wallet users reporting to use it, followed by Zalo Pay, VT Pay, Grab Pay (Moca) and AirPay. Mobile e-wallets have an advantage over other payment methods in terms of ease, speed, rewards, promotions, and low fees.

Mobile e-wallet providers still face some challenges, such as the inability to provide interest or credit, and the necessity to be linked to a bank account. However, they have a strong user experience and high net promoter score, making them a preferred choice for many consumers.

The future of e-payments in Vietnam looks promising, with four driving forces:

Non-cash payment transactions have seen a significant increase in Vietnam, with a 51.11 percent growth in volume and 39.49 percent growth in value compared to the same period in 2023. This shift from cash to non-cash payments is evident in the decline of ATM transactions, which decreased by 14.15 percent in volume and 7.84 percent in value.

By the end of 2023, Vietnam had over 182 million personal payment accounts, with about 87.08 percent of adults owning payment accounts. This growth in e-payment adoption is expected to continue, driven by the increasing use of mobile devices and the internet.

E-payments and mobile wallets are perceived as fast, simple, and cheap by Vietnamese consumers, contrasting with bank cards which are associated with a good reputation, large networks, and a stable secure system.

The user experience with e-payments is stark in its dichotomy, with e-payment and mobile wallets being perceived as fast, simple, and cheap.

Mobile wallets users also use a bank's mobile application (or vice versa), and e-payment users are typically young, high-income white-collar professionals.

The leading bank mobile application transactions are for money transfers, postpaid mobile credit top-ups, and paying utility bills.

Mobile e-wallets have the advantage on ease, speed, rewards, promotions, and low fees, with a strong user experience and high net promoter score.

Mobile e-wallet providers still face State Bank hurdles with the inability to provide interest nor credit and the necessity to be linked to a bank account.

Here are the top 5 best e-wallets in the Vietnam fintech market, based on user base and market capitalization:

Momo is the most salient mobile e-wallet by far, with 9 in 10 consumers mentioning it first when asked to recall mobile e-wallet brands.