The adoption of e wallet among youngsters in vietnam an exploratory study

Drawing on the data collected via in-depth interviews with ten young people, this research aims to identify encouraging and impeding factors of young Vietnamese people in using digital w

The adoption of e-wallet among youngsters in Vietnam: an exploratory study

Dao Tran Minh Anh1, Duong Thanh Ngan2*

1 Hanoi – Amsterdam High School for the Gifted Students, email:

daotmanh@gmail.com

2 Corresponding author; Foreign Language Specialized School, email:

thanhngan3002@gmail.com

Abstract

Along with the rapid growth of the Internet, digital wallets have become increasingly popular in Vietnam Under this circumstance, this research is the first study in Vietnam examining digital wallet’s usage of Vietnamese youngsters Drawing on the data collected via in-depth interviews with ten young people, this research aims to identify encouraging and impeding factors of young Vietnamese people in using digital wallets This research’s findings may help people understand Vietnamese attitudes towards this new form of payment and give some implications for Vietnamese e-wallet developers

Keywords: e-wallet, Vietnam, youngster

Introduction

Under the Fourth Industry Evolution, electronic devices have become much more important in Vietnamese people’s daily life, which clearly shows in the rise of Vietnamese device owners Vietnam’s young population and low service costs result in

a fairly high rate of usage of these devices, including accessing the Internet (Chadha, 2016). 

Following the growth of electronic production, many online application systems have

ResearchCoach In Social Sciences’ Working Papers

been developed gradually to benefit the diverse necessity of users Among these developments, digital wallet, or e-wallet is a new innovative financial service, which has received considerable attention from practitioners, users and scholars in recent years According to Merchant Machine (Merchant Machine, 2018), in 2017, more than

1 billion people around the world are using a variety of mobile payment platforms, with 600 million users on WeChat Pay alone On average, 18 percent of a country’s phone users are using e-wallet service By the end of 2019, 2.1 billion people will be estimated to be using this innovative system across the globe

Digital wallet is a payment service on our electronic devices that saves and protects

our banking information and allows us to make money transactions online without cash (Williams, 2019) This can include purchasing for goods online or directly paying with one’s phone in a store. 

Previous studies have examined different aspects of digital wallet’s utilization For instance, Rathore (2016) pointed out three major factors that influence consumer adoption, including convenience in buying products online, brand loyalty, and usefulness of digital wallets (Rathore, 2016) Besides, this study also proved that security and safety of the funds is the most challenging issue for users Moreover, there is another research which discussed the impact of demographic factors on the adoption of digital wallets (Singh & Rana, 2017) The results revealed that there is no significant difference perceived by respondents for various attributes of digital payment on the basis of gender, age, education, profession and annual income Under this circumstance, the purposes of this study are two-folds:

(1) To identify the encouraging factors of Vietnamese youngsters using digital wallets (2) To identify the impeding factors of Vietnamese youngsters using digital wallets

Literature Review 

A digital wallet (or e-wallet) is a software-based system that securely stores users'

payment information and passwords for numerous payment methods and websites (Kagan, 2020)

Digital wallets are digital versions of your credit and debit cards stored in an app on

your mobile device (Kagan, 2020)

Digital wallets first emerged in the mid-1990s with much hype, but a lukewarm public reception The earliest version required the customers to download the digital wallet vendor’s software and store it on their computer This led to a great number of disadvantages including slow connections, risk of downloading over again when updating, and inability to make a purchase from different devices (Encyclopedia,

2020) The second generation had associated with some large banks at that time; however, these wallets were proprietary, allowing customers to store only one type of card in an application Nowadays digital wallets are of the third generation They are much more convenient, are able to store a great deal of information (many cards in one device), and work with virtually any websites (InformIT Editorial Team, 2004) Previous studies identified several advantages and disadvantages of e-wallets in comparison to traditional wallets On the one hand, digital wallets offer consumers more convenience, simplicity, and rewards In particular, you will no longer need to carry wads of cash, plastic cards, or even queue up for ATM withdrawals With the freedom to transact whenever and wherever you want, you don’t have to be physically present to conduct a transaction or be forced to do so only during office hours (Ramya

et al., 2017) Additionally, digital wallets also offer more simplicity and lower cost of emissions than traditional wallets Electronic money does not have to be printed, using huge production capacities, labor, raw materials, which is associated with high costs (Poliushkevych, 2019) Moreover, online payment often offers a variety of rewards and discounts that can save people’s money after using it for a sufficient amount of time (Gaille, 2018) On the other hand, digital wallets cannot eliminate your security risks The security of your smartphone or mobile device is dependent on the settings you use If people don’t have their device protected with some type of password, then someone could steal their device and potentially access the funds in your bank account or credit cards What is more, e-wallets may encourage reckless spending When money is electronically-based instead of a physical item, some people can over-spent their money, and result in their budget’s imbalance (Gaille, 2018) E-wallet has appeared in Vietnam since a long time ago but it was not until 2014 that this form of payment gradually became popular with the pioneering of big brands such

as Momo Wallet, VTC Pay, Samsung Pay, and Zalo Pay Cimigo's research indicates that MoMo, Moca, and ZaloPay are the three most commonly used e-wallets in Hanoi and Ho Chi Minh City which account for 90% of the market share of e-wallet users (Cimigo, 2020) Digital wallets are often used to transfer money, pay recurring bills, pay for food delivery services and reserve technology cars On average, a Vietnamese spends approximately 500 thousand VND with about 1.6-2.2 transactions a day, which

is a relatively high frequency (Cimigo, 2020)

Research Methods 

Ten Vietnamese young people were invited to an in-depth interview in order to gain more information about the usage of digital wallets in Vietnam The interviews were taken place during the first wave of COVID-19 pandemic in Vietnam (March-April 2020) Thus, for the sake of safety, interviews were undertaken through online instruments such as Messenger or Zoom Online in-depth interviews were also

employed by some previous works (Iacono et al., 2016; Jenner & Myers, 2019)

The table below represents the demographic profiles of the research participants

Table 1 Demographic profiles of the research participants

Each interview lasted from 10 to 15 minutes Each of the two co-authors interviewed five interviewees The interview started with a quick warm-up by asking interviewees’ profiles and discussing the general purpose of the study Subsequently, the interviewees were asked whether they know, and use digital wallets and why they choose to use this service All these recorded interviews were conducted in Vietnamese and then translated into English by the interviewers

Results and Discussion

Awareness on e-wallet

E-wallet seems to be popular in Vietnam as most of our participants are highly aware

of such new financial means

The second participant (female, 25, marketing professional) stated: 

“Wow, different types of digital wallets are advertised everywhere on social media!”. 

Another participant (male, 19, university student) asserted: 

“Both my parents are using them so I have known what is e-wallet since I was little.” 

Nowadays, with the growing numbers of cashless wallet types, people can get much easier access to this service.  Advertisements arise on many social media platforms, so users hardly never come across one before Curious about the advantages shown in the advertisements for mobile money, people will press on the screen and slowly learn how to use this service Soon enough, many old and young will at least use one type of e-wallets. 

Table 2 Profile of some notable e-wallet services in Vietnam

No

.

Name of

e-wallet

Year started

Owner Number of banks

associated

Electronics

More than 20

3 ZaloPay 2016 VNG Corporation More than 30

Source: (M_Service, 2014; Samsung Electronics, 2015; Vietnam Esports, 2016; Viettel Group, 2018; VNG Corporation, 2016)

Figure 1 An advertisement of Momo

e-wallet

(Pay in 10.000 VND for 50.000 VND in return) Source: (Momo, 2016)

Figure 2 An advertisement of Zalo Pay

e-wallet

Pay for 2 seconds - receive in

2 hours Discount 50% + Tikinow free Receive additional 4 25.000VND vouchers Source: (Zalo, n.d.)

Figure 3 Advertisement

of AirPay e-wallet

Use Airpay in Shopee, receive 100.000VND for free Source:(Airpay, 2019)

Encouraging Factors

Overall, the in-depth interview reveals that there are three main encouraging factors

of people using digital wallets which are (i) convenience, (ii) safety, and (iii) effective money management. 

(i) Convenience

According to the in-depth interview, convenience is the most popular factor that encourages people to use digital wallets More particularly, four over six e-wallet users in the survey chose to use this form of payment because it is convenient. 

The first factor that makes digital wallets convenient is the system’s ease of use The second respondent commented (female, age 25, marketing professional): 

“Most e-wallets have user-friendly interfaces”

Additionally, digital wallets help users reduce the need to travel The respondent No.2 commented (female, age 25, marketing professional): 

“With digital wallets, face-to-face transactions are no longer mandatory Instead, I can snow easily make necessary purchases at home”

Lastly, people also use digital wallets as they allow fast online and international

transactions According to respondents No.5 (female, age 22, marketing professional):

“I am having an online job so I always need Momo to receive and send money to others.” 

(ii) Safety 

The second most popular reason people use e-wallet is safety Two over six digital wallet users included safety as the reason why they use e-wallet. 

Particularly, respondent No.2 (female, age 25, marketing professional) commented:

“Another reason I chose this form of payment is that saving money in digital wallets is comparatively safe.”

Moreover, digital wallets allow users to connect with banks whenever and wherever they want, which will be extremely useful in emergency situations According to respondent No.9 (female, age 17, student):

“Even if my phone or wallet is stolen, I can still keep my money safe by making a call with banks and lock my accounts.”

(iii) Effective money management

Last but not least, respondents in the interview also commented that they manage their money more effectively with e-wallet Precisely, people can easily keep track of their spending through monthly or weekly financial reports in digital wallets Moreover, by using this form of payment, people can also receive ample of attractive discounts from both online and offline stores.  According to the tenth interviewee (female, age 15, student):

“Digital wallets have a special function to help users keep track of their spending They also suggest a lot of discounts.”

Impeding factors

On the other hand, there are three main impeding factors that make four respondents

in the survey not use digital wallets namely (i)risky, (ii)small need and (iii)personal habit

(i) Risky

The first one, risk, is also the mode factor that prevents people from using digital wallets Particularly, there are two main worries when people use this type of payment which are losing money and losing information. 

People worry that they may lose money due to their lack of understanding about this form of payment According to the sixth interviewee (female, age 17, student): 

“I do not really understand how to use this form of payment Therefore, I worry that if

I use it, I may lose my money without knowing it.”

On the other hand, others choose not to use e-wallet because they do not believe in their information security The respondent No.8 commented (male, age 17, student):

“I’m afraid that the company managing digital wallets may sell users information and bring me inconveniences.”

(ii) Small need

People also chose not to use digital wallets because they do not need to More particularly, those people do not usually manage much money or make online transactions so they feel it more convenient to pay by cash For example, the fourth respondent (female, age 20, student) commented: 

“I do not usually make online transactions so I do not see the need to use a digital wallet.”

(iii) Personal habit

The last impeding factor for people using e-wallet is their unchanged personal habit Some people still get used to spending cash, which makes it difficult for them to save and manage money online A typical example for this statement is the respondent No.8 (male, age 17, student) who commented:

“I still have the habit of making transactions in cash so I do not use the e-wallet.”

Or as the respondent No.6 commented (female, age 17, student):

“I like the feeling of holding and spending cash; therefore, I don’t intend to use an e-wallet right now.”

Conclusion

With the rapid development of the internet, digital wallets have become increasingly popular in Vietnam Ten in-depth interviews were conducted in order to gain more information about Vietnamese youngster’s usage of digital wallets Overall, this form of payment is relatively popular in Vietnam People in the country often choose to use e-wallet because of its convenience, safety and effective money management On the other hand, there are three main factors that prevent people from using e-wallet which are risk, small needs and personal habits. 

This is the first research work about digital wallet’s usage in Vietnam Despite having some deficiencies such as small sample size, this research still has undeniable contributions to people’s understanding of Vietnamese youngsters’ attitudes towards

e-wallet Its results may give some implications for e-wallet researchers and developers, which can help improve the digital wallet’s services in Vietnam

REFERENC ES

1 Airpay (2019) Immediately get VND 100,000 when paying via AirPay Wallet

on Shopee from September 26 to September 30 https://dantri.com.vn/kinh- doanh/tang-ngay-100000-dong-khi-thanh-toan-qua-vi-air-pay-tren-shopee-tu-269-den-309-20190925200540323.htm

2 Chadha, R (2016) Vietnam Online: Digital Usage and Behavior, 2015-2020

EMarketer

3 Cimigo (2020) How do Vietnamese people use digital wallets?

4 Encyclopedia (2020) Digital Wallet Technology Encyclopedia

5 Gaille, B (2018) 13 Electronic Wallets Advantages and Disadvantages

Brandon Gaille

6 Iacono, V Lo, Symonds, P., & Brown, D H K (2016) Skype as a tool for

qualitative research interviews Sociological Research Online https://doi.org/10.5153/sro.3952

7 InformIT Editorial Team (2004) Digital Lifestyles Reference Guide InformIT

8 Jenner, B M., & Myers, K C (2019) Intimacy, rapport, and exceptional

disclosure: a comparison of in-person and mediated interview contexts International Journal of Social Research Methodology https://doi.org/10.1080/13645579.2018.1512694

https://www.investopedia.com/terms/d/digital-wallet.asp

10 M_Service (2014) Momo E-Wallet momo.vn

11 Merchant Machine (2018) The Rise of Digital & Mobile Wallets: 2020 Global

Usage Stats Merchant Machine

12 Momo (2016) MoMo Promotion - Top-up 10,000, get 50,000

https://vidientumomo.com/khuyen-mai-momo-nap-10-000-tang-50-000/

13 Poliushkevych, A V (2019) Advantages and Disadvantages of using electronic

money Наукові Розробки Молоді На Сучасному Етапі Київський Національний Університет Технологій Та Дизайну

14 Ramya, N., Sivasakthi, D., & Nandhini, M (2017) Cashless Transaction: Modes

, Advantages and Disadvantages International Journal of Applied Research

15 Rathore, H S (2016) Adoption of digital wallet by consumers BVIMR’s

Journal of Management Research

16 Samsung Electronics (2015) Samsung Pay samsung.com

17 Singh, S., & Rana, R (2017) Study of Consumer Perception of Digital Payment

Mode Journal of Internet Banking and Commerce (JIBC).

18 Vietnam Esports (2016) Airpay airpay.vn

19 Viettel Group (2018) Viettel Pay viettelpay.vn

20 VNG Corporation (2016) Zalo Pay zalopay.vn

21 Williams, G (2019) What Is a Digital Wallet? U.S.News

22 Zalo (n.d.) ZaloPay Free Promotion TikiNow + Get 50% off, up to 100k + Get

4 more Tiki 25k https://khuyenmaiviet.vn/zalopay-khuyen-mai-mien-phi-tikinow-giam-ngay-50-toi-da-100k-nhan-them-4-voucher-tiki-25k

Research coach in Social Sciences Preprints: