Zion Joint Stock Company (Vietnam)

The subject engages in providing intermediary payment services. According to our investigation, the key information is as follows:Flagging e-payment as a promising sector, VNG acquired Zion in 2016. However, similar to e-commerce, companies running e-payment business have been constantly reporting losses. As a result, early last year VNG had to narrow its ownership rate at the firm from 100 to 60 per cent.According to the State Bank of Vietnam, the Vietnamese market had about 46 e-wallets and non-bank payment intermediaries on 16 Nov 2021.Zion was licensed by the State Bank as a payment intermediary in early 2016.In the recently published financial report for the fourth quarter of 2019, VNG said that the ownership rate at the operator of the payment platform, ZaloPay e-wallet, Zion has decreased to 60%. At the end of July 2019, Zion continued to raise capital to VND 612.3 billion VND. Combining the figures on the financial statements, it could be seen that VNG did not participate in this capital increase of Zion. According to VietTimes' calculations, the consideration that VNG had collected from the number of shares sold to partners was more than VND 464 billion, equivalent to the purchase price of VND 18,941 per share of Zion. Therefore, the ZaloPay e-wallet management unit was valued at nearly VND 1,160 billion.On June 30 2020, VNG's ownership in Zion has remained unchanged since last year at 60 per cent, but its investment doubled to VND714.79 billion ($31 million). However, on the flip side, VNG also raised its provision for the firm to VND 371.4 billion ($16.15 million), up 75.8 per cent year to date.VNG has set an allowance of VND 946.2 billion with an investment in Zion as of June 30, 2021. The provision for the investment in the company of more than VND 1,540 billion, nearly 1.5 times higher than at the beginning of the year 2021.In 2022, VNG is looking for a solution for ZaloPay through its $22.5 million investment in Funding Societies. Funding Societies currently leads the regional market in digital capital financing, while promoting cost management and B2B payment services for micro, small and medium enterprises (MSMEs) across the world throughout Southeast Asia.The ability to combine Zalo messaging application and ZaloPay e-wallet with Funding Societies opens up countless opportunities in providing the optimal borrowing experience for businesses in Vietnam. Therefore, the handshake between VNG and Funding Societies can open up a positive direction for ZaloPay, through funding for SMEs or MSMEs.The competitors are Napas, Vnpay, M_Service JSC, BankPay, Vietnam Online, Viet Union Corp, Vietnam Esports, ECPay, Zion (ZaloPay), VNPT Pay, Vimo, Viet Phu Payment, Moca, FPT e-wallet, M-Pay, OnePay, Wepay, 1Pay, VNPT-Media, Vinid Pay, Viettel, Vinatti, Vimass, Smarrt net, Edenred, PayTech, Epay, FinViet, Mecorp and so on.The partners are Baemin, Tiki, Sendo, Big C, GO!, Bach Hoa Xanh, Lotte Mart, etc.