The key players in Vietnam’s fintech battleground

This is the latest version of the article that was published on July 13, 2021.

 

MoMo’s new headquarters occupies three floors at Phu My Hung Tower in District 7, an upscale area of Ho Chi Minh City. The fintech firm is Vietnam’s latest unicorn after its US$200 million series E round led by Japan’s Mizuho Bank, which was announced in December 2021. The fancy office signifies MoMo’s dramatic growth from a SIM card-based digital wallet to a payment app reaching 31 million users.

MoMo has cornered more than half of the market share in Vietnam’s digital wallet space. The company is targeting to become a fintech super app, mirroring the strategies of WeChat and Alipay. To that end, MoMo has added financial services such as credit scoring, savings, and buy now, pay later (BNPL) onto its platform.

The pandemic has accelerated adoption of digital payment services in the country, with the State Bank of Vietnam estimating that mobile wallet transaction value reached nearly US$15 billion in 2020. However, the majority of users still haven’t used fintech platforms for their other financial needs.

As such, digital payment companies like MoMo must diversify their offerings and tap into underserved segments. These companies should expect intense competition from niche players like Timo (digital banking), Infina and Anfin (investment apps), F88 (digital lending), and a host of BNPL and insurtech startups.

In addition, commercial banks and telecom operators have swiftly moved to offer digital financial products. In fact, most of their payment apps rank highly in both downloads and active users.

Unlike fintech companies that constantly have to raise funds, commercial banks have far deeper resources. In 2021, two of Vietnam’s major commercial banks, Vietcombank and Techcombank, both achieved the billion-dollar profit milestone. Banks have also started offering zero-fee policies for selected features to lure back customers from fintech platforms.

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