HO CHI MINH CITY/HONG KONG/SINGAPORE - Just next to Ho Chi Minh City’s financial district, two dozen street vendors’ stalls display colorful adverts for e-wallets backed by private equity firm Warburg Pincus, ride-hailing firm Grab and Singapore sovereign wealth fund GIC, among others.
The wallets, which hope to take advantage of Vietnam’s plan to become a cashless economy by 2027, compete fiercely to gain many users to help them to turn a profit, a battle for market share replicated across Southeast Asia. Many have the cash. Grab plans to invest $500 million in its Vietnam business, with payments a focus area. Softbank’s Vision Fund and GIC invested $300 million in e-wallet VNPAY’s parent company in July, and e-wallet Momo raised $100 million from Warburg Pincus in January, according to news publication DealStreetAsia.
“We expect to be present across Vietnam and win 50% of the market with 300,000 acceptance points by 2023 from 60,000 merchants now,” NextPay’s CEO Nguyen Huu Tuat said, while noting that getting customers to change their habits was a challenge.Some wallets, including the partnership between local firm Moca and Grab, offer buyers discounts of up to 30% if they use their wallet, stallholders said.
The region’s largest players, including ride hailing-turned super apps Grab and Go-Jek, are betting that becoming the main payment method will bind consumers into their networks and offer them higher margin services — a model that Alibaba and Tencent pioneered in China.