How can a digital wallet succeed in Vietnam?
OW: Good afternoon! Could you please introduce yourself?
HT: Hi, my name is Hermann Tischendorf, as you probably know, I am Austrian. I have been working about 20 years in the banking industry. My former role is CIO of Raiffeisen Russia, after Russian Standard I moved to Kazakhstan where again I was CIO at Eurasian Bank, then after Kazakhstan I finally ended up in Vietnam, where we are actually involved in setting up a mobile financial services ecosystem.
OW: Is it the right time to launch a financial inclusion wallet in Vietnam?
HT: Vietnam as a market is in the right timing for these kinds of services. Of course, there will be competition but the market itself is big enough, Vietnam has about 100 million people, out of which roughly 25 million are underbanked or non-banked, plus the way we put things together with the help of OpenWay is something that has not been done before.
OW: How is SmartPay different from other digital wallets?
HT: We have 30 different wallet companies in Vietnam, at the end of the day, we are a business, that means we need to earn money. We believe that you are only able to earn money if you are providing a service that is actually adding value to the customer who is coming to us. This leads us to the situation that we are required to provide more than just a pure wallet solution. This requires that you think outside the box when you think about what services you need to add to provide this added value to the customer that the customer is ready to pay for at the end of the day. So in our case, we provide not just a value store, we provide the opportunity to manage your funds and we give you the whole ecosystem of things on top of that. So that I think is the major differentiator.
What customer pain points points does SmartPay address?
OW: What customer pain points does SmartPay address?
HT: If you take a look at the incumbent market participants, they are catering to a different segment of the market. And basically, those people that we are looking for, they are not included, they are basically excluded. They are so busy making ends meet and making sure that they make their day. They don’t have time to spend figuring out where they can get help, where they can get support. And we are addressing these needs.
So we are providing services that are particularly tailored to the needs of these people. These people don’t have access to credit. They don’t have access to savings products. They don’t have the opportunity to open a small web shop and show their products to the world. We are giving them a platform that is doing all this on top of payments. Payments is what we would call a hygiene function. It’s something you need to have. But that is one of the reasons why we understand that no one is making money from payments. It needs to be there, but it is enabling all the other stuff. This is the sort of glue that is holding the whole thing together. Whoever is a buyer or a seller, or a private individual or a merchant, needs these services in one way or another, if we want to get people out of cash and into electronic payments.
Why has SmartPay chosen WAY4?
OW: Why has SmartNet chosen WAY4?
HT: We were evaluating about 10 different platforms from different providers all over the world. And the way we figured out these requirements and this reality that we didn’t want to build.
Together with OpenWay, FaaS makes sense. If you go to absolute figures, the GDP per capita in Vietnam is about 3000 US dollars per year. That means the average person there has about 250-300 dollars a month. And we asked ourselves, how much of that money is going to end up in the wallet? When you ask these questions from this side, you understand that you need to come with a very low cost operational model. And this is where OpenWay comes into play. So we said OK. We are not able to charge a lot, because the people don’t have the money. But we still want to provide services to get them into a stage where we can actually cross-sell them and up-sell them services where we are. This is only possible if you are going to this whole market into this whole discussion, with a solution that is cost-effective. That was the major driver around the decision to go with OpenWay.
Number two, OpenWay is a recognized international player in the payments market. Your solution is powering some of the largest banks globally, so we didn’t have any concerns in terms of stability and scalability. Basically, as long as you have a way to talk to people you will get an answer and they will help you to scale. In Vietnam, as I mentioned before, FaaS has the potential market in the tens of millions, of course, this is a theoretical figure but you need to be ready in your plans to get there. We have a very simple principle, we plan and we build for success.
What will the future bring to SmartPay?
OW: What will the future bring to SmartPay?
HT: It depends on the environment. I understand that everything which says wallets at the moment is now very hyped. On the other hand, with my background in banking, I’m not 100 percent sure, or actually I am 100 percent sure that banking as we know it will not exist in the forecoming future. I’m using wallets myself for quite some years for different purposes, and I have developed trust in using wallets.
So before my banking relationships were based on trust in an institution, which is being replaced step by step with the trust that I have in the platform. I personally would not have any issues linking up my bank accounts to any trusted wallet platform, actually, I am using SmartPay myself. Not just because I’m doing it, of course, that’s one aspect, but what I like is speed. Just to give you one example, from the moment you download the application until you are fully KYCed and can hook up your current account from another company or another bank as a funding source, that’s something that you can get done within a couple of minutes.
Try to find these things over the year in other countries and other banks. This is what tells me that something is going to change radically.
