MoMo sticks to super-app strategy despite rising competition

Vietnamese fintech unicorn MoMo remains confident in its super-app strategy despite the increasingly fierce competition in its home market, executive vice chairman and CEO Nguyen Manh Tuong said at Tech in Asia’s Saigon Summit held on May 30.

In a sign of just how stiff competition has become, Grab recently announced that it will close its e-wallet service in Vietnam on July 1. The firm launched the wallet alongside local payments provider Moca in 2018.

MoMo executive vice chairman and CEO Nguyen Manh Tuong at a fireside chat as part of Tech in Asia’s Saigon Summit 2024 / Photo credit: Tech in Asia

In addition, the soaring popularity of the standardized QR code system introduced by the National Payment Corporation of Vietnam (NAPAS) in 2021 has put pressure on e-wallet firms. The NAPAS VietQR system allows customers to scan and pay across banks’ mobile applications.

See also: Vietnam’s QR code revolution puts pressure on digital wallets

Despite this, Nguyen told Tech in Asia that he doesn’t see VietQR as a competitor to MoMo. “I always tell my team that I’ve waited 14 years to see Vietnam really become a cashless economy. We’re moving there and at a very fast pace and I’m very happy about it.”

“As a market leader, we get a lot of advantages from that trend (the rise of QR codes), because now our users use our app more than before,” he added.

In late May, the State Bank of Vietnam announced that for the first four months of 2024, cashless payments in the country increased by 57.1% in volume and 39.6% in value compared to the same period last year.

As part of MoMo’s growth strategy, more financial products and services are being constantly added to its ecosystem. Most recently, the company introduced stock trading services with local securities firm CV Securities, which the fintech unicorn has a 49% stake in.

Although some of MoMo’s services, such as a feature that lets users invest with amounts as small as one or two dollars, may have lower profit margins, Nguyen emphasized that the company’s product mix helps ensure its overall financial stability.

See also: Vietnam’s e-wallet war has just begun, and it will be brutal

In addition to fierce competition, fintech firms in Vietnam must also deal with a changing regulatory landscape. From July 1 this year, biometric identification such as fingerprint scans or facial recognition will be required for all money transfers worth more than 10 million dong (US$393).

Nguyen was also unconcerned about how the new regulation would impact MoMo, saying that large-ticket transactions make up a relatively low percentage of the platform’s total payment volume. He added that the firm would provide feedback for regulators after observing how the new rule plays out.

When asked if MoMo was planning an IPO within the next five years, Nguyen declined to answer. However, he noted that the company is not currently fundraising, and going public would depend on MoMo’s shareholders and board of directors.