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More and more merger & acquisition (M&A) deals in the e-wallet and online payment sector have been reported recently. Most recently, VMG sold all of its 62.25 percent of stake in VNPT Epay to UTC Investment from South Korea.
Meanwhile, MobiFone, one of three largest telcos, is still trying to develop Vimo, though the e-wallet is little known in the market.
M_Service in March received $28 million capital for MoMo wallet from SCPE and Goldman Sachs. FPT’s e-wallet received an operation license in April.
And in June, NTT Data Corporation, through NTT Data Asia Pacific (Singapore), obtained the right to control VietUnion Online Services Corporation, which runs Payoo. Prior to that, it bought 40 percent of the e-wallet stake in 2011.
|Many e-wallet systems were started for the primary reason to create an ecosystem for e-commerce, but their owners fear they may not make money from the service.|
In a quiet move, Softpay Mobile (Singapore) bought most of stakes of Vietnam MPOS Technology, a hardware product of Hoa Binh Software JSC, owner of Ngan Luong e-wallet.
A Fintech Vietnam Startup report showed that 23 out of 39 fintechs in Vietnam operate in the online payment sector.
The e-payment market seems to be even more attractive as a report shows that banking transactions account for a small proportion in online operations in Vietnam (less than 5 percent).
However, though the market has great potential, the existence of too many payment intermediaries will lead to an oversupply. The owners of old ewallets understand this well.
Investors in e-wallets believed in the strong development of e-commerce, but it has not developed as expected.
Nguyen Hoa Binh, president of NextTech Group (Peacesoft in the past), said only a few payment intermediaries now perform well.
“The majority of other service providers have had difficulties and are living with investors’ money,” he said.
Mobivi, which was initially positioned as an e-wallet to support intermediate payments, has shifted to provide personal financial products.
MoMo has also experienced different development paths. Now, it is a mobile app allowing customers to transfer money and make payments for services and products (water & electricity bills, payments for insurance premiums and loan interest).
One problem has arisen for payment intermediaries – the appearance of new rivals.
Commercial banks now run banking models like fintech (VP Bank has Timo, while Maritime Bank has MEED). Meanwhile, Mobile Banking apps also make payments for bills and provide other services.
Conquering niche markets is a good way for fintechs to follow. However, it’s still unclear about their fate, as there are too many brands in the market, which is still small.