GlobalData Plc

Has Vietnam’s mobile payment unicorn emerged?

The mobile payment space in Vietnam is ripe for exponential growth, and Momo is well placed to leverage this market potential.

The factors driving the potential in Vietnam’s mobile payment space are reminiscent of the situation in China a few years ago. Similarly, a single domestic player seems ready to lead the charge and Momo could emerge as Vietnam’s first e-payment unicorn.

Momo, the mobile wallet service operated by M_Services JSC since 2011, has now proven the potential of its offering and the market itself. In March 2016 Momo announced that it had received $28m in Series B funding from Standard Chartered and Goldman Sachs. Using this investment, M_Services will launch new solutions under the Momo brand and embark on a POS terminal rollout at retail outlets across Vietnam.

There are three factors in Vietnam supporting this bold expansion: the relatively young population, the rate of smartphone penetration surpassing 50%, and the majority of the market being unbanked. This market situation is very similar to the one Alipay entered a few years ago in China with considerable success. Interestingly, Alipay showed that it is not necessarily critical to provide a product that is manifestly superior to others in order to succeed. Rather, what is essential is having the right business capabilities at the right time, and being able to execute to fill the gap in the market.

With Momo’s service already in place, it has ironed out the wrinkles in its proposition and is operationally now in an expansion mode. With the backing of two large global banks, Momo’s service could be the next billion-dollar mobile payment startup, and certainly should be the one that will dominate the mobile payment space in Vietnam.

By Arnie Cho, Senior Consumer Payments Analyst

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