For Vietnamese e-wallet MoMo operator M-Services – that has received a total of $33 million funding from Goldman Sachs and Standard Chartered Private Equity before it announced another investment from Warburg Pincus earlier this year – the biggest competitor it faces is the cash economy, not other rivals in the region.
While it has expanded its scope of operations to money transfer and lending, MoMo is pinning hopes on cashless transactions, accounting for 10 per cent in Vietnam, gradually increasing to 50 per cent in the next three years. “In the next two to three years, cashless payment will be the force that will significantly shift the Vietnamese economy,” Pham Thanh Duc, CEO of M-Service, told DEALSTREETASIA,in an interaction.
While fintech is sweeping through the traditional economy in Vietnam like everywhere else in the world, the vast majority of the local people remain unbanked or underbanked. According to World Bank, only 40 per cent of Vietnamese adults had a bank account in 2017. MoMo is one of the local companies targeting at the other 60 per cent.
Founded in 2007, M-Service was the first company to build mobile money solutions and also the first to receive e-wallet licence from the State Bank of Vietnam.
MoMo will continue to focus on its core business of payment as new services hinge on external factors like regulations and consumer behaviour. “MoMo is a consumer brand. Therefore, once a service is implemented, it is required that we serve a wider customer base of millions of people,” he said.
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