Mastercard’s country manager said they aim to provide global networking and personal flexibility.
Mastercard office in Ho Chi Minh City. Photo: Lien Hoang.
Most Vietnamese users do not use Mastercard and the company says they can completely adapt to that. All Mastercard wants now in consumers in Asia’s fastest growing economy is to give up cash – even if that forces them to go head-to-head with competitors like wallets. electronic.
Mastercard is diversifying beyond conventional credit cards to serve emerging markets as well as booming technologies. Winnie Wong, Regional Director of Mastercard in Vietnam, Cambodia and Laos, said the company is preparing for technological changes in Vietnam so they can become part of most future payment methods. , from smartwatches to QR codes.
“It’s no longer the story of payment cards. Right now, it’s any form factor – maybe QR, maybe virtual money, maybe smart wearable, maybe anything. what can we digitize “she said.
Wong’s company is now facing a proliferation of e-wallets across Asia, where many “leapfrogged” by skipping credit cards to go straight to e-wallets. Base on the research “Visa Consumer Payment Attitudes Study” Announced in 2020, Mastercard is starting from a very small base in Vietnam as only 56% of Vietnamese have a debit or credit card, the lowest of the six major economies in the region.
Meanwhile, with investments from Warburg Pincus and Goldman Sachs Funds, Vietnam’s largest e-wallet, MoMo, said it had reached 20 million users by 2020 and would reach 50 million within three years. next. That number eclipsed 3.9 million Visa credit cards, 2.7 million Mastercard cards, 340,000 American Express cards and 270,000 JCB credit cards in Vietnam, according to 2019 data from Euromonitor. In a broader perspective, Vietnam has licensed 29 domestic e-wallet providers.
It poses a problem for all credit networks operating in Vietnam. Merchants can dodge credit card fees, and instead customers can pay through MoMo or another fintech app.
Wong does not think Mastercard will choose to go head-to-head with payment startups, instead coming up with a seemingly more friendly scenario: collaborating on the basis of their own technology application.
For example, a customer can link their Mastercard to various e-wallets, from Vietnam’s Moca to South Korea’s Samsung Pay. Previously, a consumer would have to carry a leather wallet with five credit cards, but in the future, they would only need to carry a smartphone with four electronic cards linked to one application.
Another option is adding an e-wallet to Mastercard’s global network, although the process is still pending. “We are in a very active discussion with a number of e-wallets”Wong said.
What happens when 20 million MoMo users want to travel outside of Vietnam but don’t have a credit card? That’s the question for Grab, which has added an option for Singaporean and Filipino customers to use GrabPay to buy a virtual Mastercard or a traditional prepaid card. This allows them to pay at 53 million stores globally, a scale Mastercard promises to bring to e-wallets.
Credit card networks also have their own e-wallets. Visa or Mastercard account holders can use the app or add their card to the app from a bank or fintech company. These networks also work with banks to issue virtual versions of traditional credit cards. These options allow them to continue in the race as more and more consumers bypass physical tokens and increasingly a zero-touch payment application, allowing for customer authentication, who want to avoid images. direct contact payment method.
These forms are also more suitable for the seller, when payment through smartphones can be accepted in three main ways: buyers will open the e-wallet application on their phone to scan information on the screen. of payment terminal; send money directly from your e-wallet account to the seller; or use your phone to scan the QR code of the store provided by Visa, Mastercard or VNPay network of Vietnam.
Winnie Wong, Regional Director of Mastercard in Vietnam, Cambodia and Laos. Photo: Mastercard.
Currently, credit networks are moving toward compatibility with e-wallets, which can hold multiple cards from Discover to UnionPay. Wong said they will one day try to achieve smooth interoperability. That means if Mastercard cooperates with ZaloPay of Vietnam for example, the cardholder will be able to make payments anywhere that accepts ZaloPay and vice versa. Mastercard already does these interactive deals in other markets, such as with the Zapper fintech app in South Africa.
For the company’s growth in Vietnam, the first step is to assist consumers to give up cash, as Wong said. The second step is to get people into the habit of using it, where people still tend to save more than they borrow. Some Vietnamese even buy houses and cars with cash.
Ultimately, their main goal remains to attract locals with Mastercard-branded products, usually bank-issued cards. They will implement regular marketing methods, with discounts for customers paying with Mastercard cards at partner companies, from e-commerce site Lazada to the Grab super app.
But it seems Mastercard’s policy still retains some methods that do not seem well suited to the situation. For example, the company is calling on Vietnamese SMEs to work with partner Zoho, which sells software for office functions such as bookkeeping.
The rationale here is that businesses will replace informal accounting with a digital track record, creating data that they can transfer to the bank to assess creditworthiness. your responsibility. Those business owners will be given the right to continue to apply for credit cards for the company.
On the consumer side, credit still presents a great opportunity. Euromonitor data shows that Vietnam’s credit card payments are worth $ 12 billion in 2019 – a quadruple since 2015. Wong said both banks and fintech apps are active in the digitize the electronic payment revolution in Vietnam. As she mentioned: “This market is ripe for expansion”.
Giang Vu (Refer to Nikkei)