In October, the State Bank of Vietnam issued the payment intermediary services license to AppotaPay, a subsidiary of Appota Group which has a 55-million-user base and specializes in digital entertainment in Vietnam.
E-payment emerges in Vietnam despite the Covid-19 pandemic
In the first six months of 2020, Vietnam saw significant growth in the technology industry despite being affected by the Covid-19 pandemic. E-payment, to be precise, is one of the industries that skyrocketed during this period.
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With a population of 97 million people, Vietnam has an internet penetration rate of 70%, and 34% of the people are connected to the Internet via mobile. Thus, Vietnam is considered a high potential market for the growth of e-commerce and e-payment sectors. According to the e-payment report Landscape 2020, “Revenue from the e-payment market in Vietnam grew 14,2% in 2020, reaching total revenue of 8.904 million USD. The number of users also reached 36.2 million people, and went up by 12.1% compared to 2019.”
AppotaPay is the 39th non-bank organization that has received the payment intermediary services license from the State Bank of Vietnam. In order to receive this license, businesses have to meet stringent requirements, including a minimum charter capital of VND50 billion, high technical infrastructure and technological solutions that ensure absolutely safe and continuous services, as well as properbusiness strategy and corporate structure that facilitate the running of the payment business. Licensed services include e-wallet, electronic payment gateway, and cash collection & payment on behalf of users
Conglomerates accelerate the development of e-wallets with their own ecosystems
Conglomerates with diverse ecosystems of products and services are the key drivers of the development of e-wallets in Vietnam. For example, Moca is the payment service provider for all of Grab’s services such as ride-hailing and financial services (lending and insurance). Nextpay, a subsidiary of NextTech Group, operates in loan and mortgage, e-commerce, insurance, logistics and ride-hailing service sectors. And ViettelPay is now partnered with MyGo – a short and long-haul transportation platform under Viettel Group.
In a similar manner, AppotaPay is also part of Appota Group’s ecosystem. AppotaPay provides specialized payment solutions for digital entertainment contents in Vietnam. Appota Group’s ecosystem has over 55 million users and more than 5,000 B2B customers. The majority of users have come from the company’s published games, followed by entertainment-content mobile apps, and its newly minted enterprise management platform. Compared to other players who don’t have existing eco-systems and therefore, could take a long time to acquire users, this is a major advantage of AppotaPay.
Opportunities for foreign tech investors to join the Vietnamese market
E-commerce is one of the fastest growing industries in Vietnam, especially in the post-pandemic period. All of the big four e-commerce players in Vietnam—Shopee, Tiki, Lazada and Sendo—have e-wallets in their platforms. At the same time, the Vietnamese government has set the goal to reach an e-payment penetration rate of 30% by 2025, which indicates that the market is now more open for all e-wallet players to participate.
According to Lien Nguyen, Corporate Development Manager of Appota, “The online payment industry in Vietnam will grow significantly in the upcoming time; Covid-19, despite all of its negative impact largely on traditional businesses, has emerged as an unexpected factor that’s accelerated online payment activities in Vietnam. Consumers, especially young millennials, are changing their habits at an even faster pace than before, adopting and embracing new online technologies and services, with a new mentality that allows them to trust e-payment providers to keep their money and process their transactions online. This opens up opportunities for cooperation between e-commerce and online payment businesses, in live-streaming commerce for example, to further drive online payment in Vietnam.”
In the digital entertainment industry, Appota has always been a leading player, and receiving the payment intermediary services license from the State Bank of Vietnam is an important milestone for Appota to expand other payment services.
“In the future, the products and services within our Appota ecosystem will continue to leverage one another simultaneously. We will not develop our user base the same way other players are doing because it would take a lot of resources, yet consumers are not sticky to the platform. We will focus more on providing diverse and unique digital contents, as well as a seamless payment experience to capture the market,” stated Nguyen.
Appota is a pioneering organization in providing technology solutions and digital entertainment content in Vietnam. Appota’s ecosystem has over 55 million users and the company is also one of the major game publishers in Vietnam. Appota is also the exclusive partner of Facebook to develop the Facebook Gaming Creator platform in Vietnam. Key business areas include: Game Publishing, Gaming Creators Network, Advertisement, Payment, Smart Office, and Internet Infrastructure.
In 2017, it raised an undisclosed Series C funding round from Korea Investment Partners (KIP). Mirae Asset Venture Investment, Kiwoom Investment, and Seoul Investment Partners.
Founded in 2011, Appota graduated from the Topica Founder Institute as the “Best Start-up of the Year” in 2013 and went from a small team of 10 to almost 400 employees globally in 2020.
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