Southeast Asia’s e-wallet providers face shakeout as market booms
- Some are using their cash to build scale as they race to secure a dominant position in a mobile payments market estimated to grow seven-fold to US$109 billion by 2025
Just next to Ho Chi Minh City’s financial district, two dozen street vendors’ stalls display colourful adverts for e-wallets backed by private equity firm Warburg Pincus, ride-hailing firm Grab and Singapore sovereign wealth fund GIC, among others.
Between them, the stalls – selling everything from crab soup to Vietnamese banh mi sandwiches – accept payment from most of Vietnam’s 28 different e-wallets, which also allow users to make cash transfers through their mobile phones.
The wallets, which hope to take advantage of Vietnam’s plan to become a cashless economy by 2027, compete fiercely to gain many users to help them to turn a profit, a battle for market share replicated across Southeast Asia.
Not all of them will survive. Already, the region’s crowded mobile payments sector is starting to shrink, with each national market expected to support only two mass e-wallets, according to consultancy Oliver Wyman.
“The e-wallets spend a lot of money on attracting customers and retaining them, getting them to use the wallet in their daily life,” said Duncan Woods, head of Oliver Wyman’s Asia-Pacific retail and business banking practice.
“When you’ve got so many of them out there, it’s about who’s got the deepest pockets,” he said.