Big-league funders at GoPay to push payments transformation

GoViet is looking into introducing in-app e-payment services for the whole country, Photo: Le Toan

Indonesian technology group Gojek has announced that the two US tech giants injected a giant sum into the ride-hailing and food delivering company. According to the group, this latest investment is part of its ongoing F-round series and brings Gojek’s total funds raised to over $3 billion.

According to Gojek, this new investment will support the company’s mission to boost Southeast Asia’s digital economy, with a focus on supporting payments and financial services in the region.

In Vietnam, Gojek’s GoViet currently operates in ride-hailing (GoBike), courier services (GoSend), and food delivery (GoFood). However, Gojek has not yet applied the GoPay e-payment method to Vietnam.

GoViet’s spokesperson told VIR that the company is exploring in-app e-payment services for Vietnam to enhance the customer experience and will make an announcement in due course.

He highlighted that the company continues to be excited about the prospect of bringing e-payment services to Vietnam as part of its broader focus on becoming a digital enabler, and in line with its super-app vision. “We believe that this will support the Vietnamese government’s effort to move Vietnam to a cashless society.”

GoPay has long been focusing on increasing access to the digital economy among micro-, small-, and medium-sized enterprises, the majority of which continue to rely on cash to operate due to the region’s large unbanked population. The latest influx of funding will support more of these businesses as they seek to digitalise further, from micro merchants selling wares on the street to large businesses looking to strengthen their digital payment infrastructure.

Commenting on the latest investment from Facebook and PayPal into Gojek, Riddhi Dutta, regional head for ASEAN and India of software company Backbase, said in a note to VIR that this signifies an accelerated push for digital transformation in the payment and financial services sector in Southeast Asia.

He explained that Vietnam’s fast-growing digital payment sector is fragmented with different players vying for a share of the pie. It is likely that there will be market consolidation of these providers while those with strong and expansive network-based business models are more likely able to sustain and fend off competition. Fintech partnerships both locally and regionally, he added, can add a competitive edge to developing a strong footprint in the market.

“With the latest announcement, Gojek, Facebook, and PayPal are joining other high-profile global corporations and new entrants in the fintech space such as Google and Tencent. Increasingly and rapidly these big techs are shifting their focus towards personalisation-at-scale in order to engage with consumers’ financial lives seamlessly through digital-first platforms,” Dutta said.

According to Backbase’s Fintech and Digital Banking 2025 report, Asia-Pacific will see 100 new financial institutions by 2025, ushered in by the liberalisation of several markets in the region and issuance of new banking licences. New digital challengers such as Gojek and Facebook will continue to enter the fintech market with innovative and agile solutions to compete for a share of the pie.

Although the new investment from Facebook aids Gojek in gaining more financial capability to roll out GoPay in Vietnam, the road ahead could still be tough as some other in-app e-payment services providers like MoMo, Zalo, and GrabPay by Moca have already developed strong footprints in the country.

According to the latest survey by market research group Cimigo, MoMo, Moca, and ZaloPay are the three most popular e-wallets in the two main cities in Vietnam, which account for more than 90 per cent of total market share of e-wallet users.

MoMo is one of the oldest players to heat up the e-wallet race in Vietnam. The group brought attention of smartphone owners to a new payment solution by offering them a variety of promotions and, as a result, MoMo has garnered a large number of users.

Cimigo’s survey shows that MoMo is mostly used for mobile top-ups, money transfers, and utility bill payments. Many experts deem MoMo as an experienced player with a deep understanding of the market.

ZaloPay, which is built on top Vietnam’s most popular messenger app Zalo, boasts plenty of advantages since its inception. Zalo is a familiar and friendly brand in the market with a huge pool of users. Hence, ZaloPay can take advantage of Zalo’s large database and famous brand to acquire new users.

Moca, meanwhile, has quickly become a big player in the e-wallet battle after only a single year into a strategic partnership with Grab, while it has taken much time and effort for other e-wallets to secure presence in the same market.

In fact, by taking advantage of the two basic services on Grab platform – ride-hailing and food delivery – Moca can enjoy a huge competitive edge over other rivals in terms of the necessity of the services and the frequency of payments.

The new investment is part of Gojek’s efforts to compete with Singapore-headquartered Grab in Southeast Asia to become the region’s leading super-app.