Electronic payment is taking off in Vietnam as people solve the problem of spotty bank coverage with payment apps and other online services.

According to the State Bank of Vietnam, less than half the population have bank accounts, with the ratio especially low in rural areas. And as mobile devices spread and communications infrastructure improves, e-payment is set to become even more popular.

The amount of e-payments in Vietnam grew 22% in 2017 from the previous year to $6.14 billion, according to Statista, a local market research firm. The figure is projected to double to $12.33 billion in 2022.

VNG, operator of the country's most popular messaging app Zalo, plans to install terminals for its ZaloPay e-payment service at 1,000 locations by the end of this year.

State-owned gas station operator PetroVietnam Oil introduced a mobile payment system in February, while M-Service, a major fintech company, plans to increase the number of subscribers to its MoMo online payment service to 50 million by 2020 from about five million today.

ZaloPay terminals will first be available mainly at convenience stores and electronics shops. The service allows users to deposit money and pay for online transactions and utility bills. It can also be used to transfer money from bank accounts and handle remittances using QR codes.

ZaloPay will be VNG's strategic product and play an important role in Vietnam's e-commerce market, said Pham Thong, business development director for the service.

The potential for ZaloPay is huge due to the company's Zalo messaging app, which already has 70 million users.

Meanwhile, PV Oil is accepting mobile payments using an account card and QR code. The system is expected to ease congestion at gas stations in a country with more than 40 million motorbikes. Moreover, payment records can be accessed online, allowing business users to keep track of fuel expenses.

Vietnam's e-payment pioneer MoMo is also racing to expand. In addition to paying for online purchases, airline tickets and utility bills, MoMo users can pay for Uber rides thanks to the tie-up between M-Service and Uber Technologies in November 2017.

MoMo's nationwide network of 4,000 agents, who provide basic banking services such as deposits, withdrawals and money transfers, make the service popular in rural areas. Migrant workers, for example, can deposit cash into their MoMo accounts and transfer it to other locales not serviced by ATMs.

Foreign companies have taken note of Vietnam's e-payment potential. The country has one of Southeast Asia's fastest growing economies real GDP increased by 6.8% in 2017 and an expanding middle class. China's Alipay, operated by e-commerce giant Alibaba Group Holding, partnered with a Vietnamese company in November to provide e-payment services.

Banks are also rushing into the business. Maritime Bank and Sacombank have launched their own QR code-based online payment services that can be used at stores and restaurants.

The increase of e-commerce companies like Lazada and Sendo is also contributing to rising e-payments as online shoppers, many of whom do not have credit cards, can avoid paying c.o.d. -- a practice that encourages thefts by delivery workers.

By Atsushi Tomyama - Nikkei Asian Review - March 22, 2018