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Jack Ma speaking at Vietnam E-Payment Forum 2017. Photo by VnExpress.

In a conversation with the Vietnam country manager of a major credit card company earlier this year, it was reiterated that less than 10% of payments are non-cash.  Credit card penetration in Vietnam, although growing, is still only at around 3% of the population.

It’s no surprise then that the payment space would be seen as ripe for disruption.

There are already more than a dozen local companies licensed in ewallets / epayments.  The more notable moves prior to the past 12 months were from local players like M-service (which in March 2016 closed a $28M investment from Goldman Sachs and Standard Chartered for its ewallet & payment app, Momo), and VietUnion (which announced the official launch of their ewallet Payoo in October 2016 after extensive beta testing).

But in the last 12 months, we have seen big foreign players make moves.

  • Grab (the Singapore-headquartered Uber clone for SE Asia, and a 500 Startups portfolio company) launched GrabPay at the end of 2016.  Initial use was for rides but they are expanding to other use cases as well.
  • Alibaba’s Jack Ma has visited Vietnam twice in the past two months, most recently speaking at the Vietnam E-Payment Forum 2017.  No doubt Alipay will make a push soon, presumably associated with Alibaba-owned ecommerce market leader Lazada. (Note: after this was drafted but before the newsletter was sent came this announcement).
  • Singapore-based, NASDAQ IPO’d Sea (formerly known as Garena) has started rolling out Airpay, e.g. via Foody (the Yelp clone for Vietnam that Sea recently acquired).

Perhaps partially in anticipation of these movements, the State Bank of Vietnam in 2016 began moving forward with Circular 19, which covers operations of bank cards in Vietnam.  A particular provision, Article 24, has NAPAS (owned by the SBV and several Vietnamese banks, not surprisingly; analogous to UnionPay in China) inserted into both sides of the credit card processing model.  The purpose is to capture data on all card transactions (for national security uses) and to earn transaction fees.  However, there are multiple negative impacts which may not have been fully considered (see half-way down the linked article), potentially including but not limited to constraining innovation and degrading data security.

Local upstarts, foreign entrants, government movements — an exciting and challenging dynamic here!  500 Startups Vietnam is not currently investing in the payment space, but given the wide-ranging impacts of what happens there, we’re keeping close attention.

For more insights like this, you may wish to check out our investor trek happening in January.  For more information, see this overview.  To apply, fill out this form.

Yours,
Team 500 Startups Vietnam

 

Vietnam In The News

 

  • TPP Trade Deal Advances Without United States. During the 2017 APEC summit in Vietnam, eleven TPP countries settled on a new pact, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). The New York Times. 11/12
  • Vietnam Is The Biggest Winner On Donald Trump’s Tour Of Asia. “…It was Vietnam that got the clearest start to the two things it really wanted from Trump’s Washington.” Forbes. 11/12
  • The US sees increase in number of Vietnamese students. A near 5% increase from academic year 2015-16 helps Vietnam remain the 6th leading country of origin of international students in the U.S. Vietnam News. 11/15
  • Billionaire Vietnamese airline CEO flies higher on list of world’s most powerful women. Vietjet’s CEO Nguyen Thi Phuong Thao ranks 55th in Forbes’ 2017 list of the world’s most powerful women, joining German Chancellor Angela Merkel and U.K. Prime Minister Theresa May. VnExpress. 11/02

 

Vietnam Tech in the News

 

  • Jack Ma: Vietnam holds huge e-commerce potential. Alibaba founder and CEO expressed high growth potential in Vietnam e-commerce. Alibaba will sign an agreement on e-commerce and science-technology cooperation with Vietnam to support the e-commerce ecosystem. Saigon Times. 11/07
  • Siemens manager: Vietnam holds big potential for software industry. Vietnam holds potential to develop its software industry thanks to having many young IT-savvy workers, according to Cedrik Neike, Member of the Managing Board of Siemens AG. Vietnamplus. 11/14
  • TNB Ventures strikes 1st deal in Vietnam in e-commerce. Singapore-based early stage investor TNB Ventures has made its maiden investment rumoured to be $20m in Vietnam by co-funding an eight-digit amount around into an e-commerce and logistics startup. Deal Street Asia. 11/14
  • GHL to enter Vietnam via strategic investment in mobile payment company. Malaysia-based GHL Systems has proposed to buy a 31.16% stake in Vietnamese mobile payment company MPOS Global Ltd for US$3.32 million. TheEdgeMarket. 11/07
  • Bill demanding Google, Facebook install domestic servers raises eyebrows in Vietnam. The draft law “has met with strong opposition from experts and an influential local business advocacy group.” VnExpress. 11/03
  • Vietnam: Greenwings invests in Hoayeuthuong; Vemanti takes over Two Group. Hoayeuthuong receives $1 million in equity funding and loan from Greenwings. Vemanti Group acquires 100% of Vietnam-based technology Two Group, which is active in e-commerce, location navigation, content streaming and social media. Deal Street Asia. 10/30
  • Lotte Accelerator to invest $1M into Vietnamese startups. South Korea’s Lotte Accelerator commits to invest at least $1 million in Vietnamese startups through an alliance with Vietnam Silicon Valley Accelerator (VSVA). Deal Street Asia. 10/27

 

Upcoming Events

 

Vietnam Investor Expeditionary Trek 2018
January 24-27, 2018  |  Hanoi & Saigon

Learn more about the country’s background, investment opportunities, and challenges through immersion and expert talks.  Along the way, meet many of Vietnam’s most promising startup founders and ecosystem leaders — including partying with the 500 Startups Vietnam family!
Event Overview

 

PreMoney SF 2017 Conference
Dec 5, 2017  |  InterContinental San Francisco Hotel

PreMoney is a one-day conference, produced by 500 Startups, about the most disruptive strategies, models & technologies for the future of venture capital. Featuring the world’s most forward-thinking investors, PreMoney will provide attendees with insight and tactics for building successful, scalable venture portfolios that are just as innovative as the companies they finance.
Register here for limited early tickets.

 

Vietnam Internet Forum 2017
November 27-28  |  Hanoi

Vietnam Internet Forum 2017,  co-hosted by the Embassy of Sweden in Hanoi and the Ministry of Information and Communications, will discuss Internet’s contribution to an open, sustainable and innovative society. Focus is on Internet accessibility and digital solutions for social impact under the theme #DigitalforGood.
Event page

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