Mobile money could give Vietnam’s telcos an edge in the payment war

With nearly 40 e-wallet providers battling it out in Vietnam’s lucrative digital payments market, a new contender has emerged: mobile money.

In March this year, the country’s Prime Minister finally approved a two-year pilot program, giving the greenlight to telco operators to roll out mobile money.

Unlike e-wallets, which in Vietnam must be linked to payment accounts, mobile money can be used in transactions using just a mobile phone account, even by those without smartphones. This is particularly beneficial for Vietnam’s “unbanked” consumers, which account for about 70% of its 96 million population.

Viettel chairman and general director Le Dang Dung at the launching event for Viettel Group’s new slogan and logo in January. /Photo credit: Viettel Group.

This approval is a long-awaited result for Vietnam’s three biggest telco operators Viettel, VNPT, and Mobifone – all of which need to further capitalize on a booming fintech sector as growth in the traditional telecom sector has already peaked.

Hidden power

In January, Viettel Group announced a new slogan and logo as part of its rebranding efforts to transform from a traditional telco to a digital services provider. The state-owned company (operated by the Ministry of Defence) hopes to appeal to younger and more digital-savvy consumers.

Its evolution had started years earlier.

In 2018, Viettel launched ViettelPay, marking its entry into the digital payments market. ViettelPay allows customers to pay bills, transfer money, make payments, and buy tickets, offering a wide range of services similar to those of other “super apps” in the country like MoMo or ZaloPay.

Photo credit: Apple’s App Store

See also: Zalo beats WhatsApp in Vietnam. It now wants to be the country’s top super app 

Despite not competing fiercely with promotions and discounts, in 2020, ViettelPay was Vietnam’s second most downloaded payment app only after MoMo, according to estimates by App Annie. MoMo has raised at least US$232.7 million from foreign investors.

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