Proper Guidance is required for Consumers to Behave well.

While the technical side of such integration is straightforward, companies like Apple and Google would want to ensure there are enough transactions running through a given platform for the integration to be worth it, said Zennon Kapron, managing director of fintech research firm Kapronasia. MoMo’s superior TPV and financials—Tuong had told Bloomberg in December that the company’s revenue almost doubled in 2021—was enough to bring Big Tech onboard. And its Series E funding was also a significant milestone.

This will mean continued discounting and more innovation

However, it was also a sign that Vietnam’s cashless payment ecosystem is entering a new phase. Beyond payments In terms of financial services, MoMo offers services like money transfer, savings deposit, quick loans, health insurance, and a postpaid wallet. However, it will have to innovate further if it has to stave off competition and reach its next growth stage. The Series E funding was only a temporary win, according to Eddie Thai, general partner at venture capital firm Ascend Vietnam Ventures.

“It also signals the next stage of competition for share of mind and share of wallet of Vietnamese consumers,” he said in an email. “Several well-capitalised players are now vying for the top spot, and I find it unlikely that the most recent round of financings will be the last for any of these. This will mean continued discounting and more innovation,” he added. Innovating beyond payments can be an entry point to other services, including customer loyalty, credit and investment on the consumer side, and marketplace or fulfilment on the enterprise side. Thai pointed out two major challenges while entering this next stage.

“The first is the complicated dance between spending money on customer acquisition and retention versus new service development, while competitors are also raising capital to do the same thing,” he said. And the second is figuring out how to execute the new services well—not just better than payments rivals, but also competitors focused on niche services like travel and movie bookings.

That team has gone on to build a credit-scoring system

MoMo has, in fact, tried to address some of these challenges through targeted acquisitions in the last year. Last month, the company bought, a payment solutions firm for small- and medium-sized businesses (SMEs), for an undisclosed amount. Nhanh has about 80,000 partners and a suite of online and offline solutions for them. “We thought this would be a way to understand their mindset more deeply,” said Shah.

“You need a platform, and with Nhanh we give them access to our tech and user base to accelerate digital transformation. It’s also ecosystem support, so everyone needs to grow bigger together.” In June 2021, MoMo bought Pique AI, a Vietnamese startup that had built a recommendation system for digital businesses like e-commerce, content, and streaming based on artificial intelligence (AI) and machine learning.

That team has gone on to build a credit-scoring system, which creates data that can be sold to other companies. It’s also developing a planned hyperlocal recommendation platform within MoMo, which would drive customers towards merchant partners in specific neighbourhoods.

“We’ll continue such mergers and acquisitions, but we do deep analysis beforehand because the natural DNA of MoMo is to build, not buy” MANISHA SHAH, CFO, MOMO While it’s still early days, the acquisitions point toward a deepening of MoMo’s localised services. MoMo knows that if it is to really scale its payments vertical, it has to also look beyond the highly developed and tech-savvy Hanoi, Ho Chi Minh City, and their industrialised neighbours. And that’s where the company’s focus is—rural expansion and financial inclusion.