Vietjet Air’s board has approved the establishment of a new e-wallet service this week and has agreed to invest $2.1 million USD (50 billion VND) in the new enterprise in return for a 51% stake in it.
Vietjet Air said in a press statement that Ho Ngoc Yen Phuong, Deputy General Director and Chief Financial Officer for the airline will be in charge of the new company’s incorporation. In it’s press statement, the airline stated that it will own 51% of the shares of the new company but did not disclose the ownership of the 49% of remaining shares.
At a recent conference, Nguyen Thi Thuy Bing, Deputy General Director for the airline disclosed that 99% of the company’s transactions – approximately $2.5 billion USD in 2019 – were non-cash payments.
Binh noted that Vietjet Air has been setting up its own partner ecosystem that allows customers use its mobile and website platforms to purchase air tickets and other services including car rental services and hotel and resort reservations.
Based upon the airlines data from 2019, the airline determined that non-cash payments are a “norm” rather than a trend and that cashless payment systems allow customers greater flexibility in their payment options and that effectively, carry cash is no longer necessary.
According to research from Asia Plus, a Saigon based market research firm, in January 2020 there were more than 20 million e-wallet accounts in Vietnam. The leading players in this sector are AirPay, MoMo, ViettelPay and Zalo Pay. These four companies account for 94% of mobile / e-wallet payments in Vietnam.
A financial analyst familiar with Vietjet Air said that it made financial sense for the airline to invest in a subsidiary and that the number of users will take off in a dramatic manner once Vietjet’s e-wallet system is in place and launched. “This is a long-term revenue stream that should be profitable for many years to come.”