ABSTRACT:

Today, with the rise of e-commerce platforms and the wide application of technology in
the field of finance, digital wallet has been an innovative and trendy way of payment. In
Vietnam, Momo is the most well-known digital wallet business, which has been spending
enormous amounts of money to attract people to use their wallet services. However,
Vietnamese consumers have already experienced a lot of monetary benefits in their
purchasing process before. Therefore, this research is carried out to explore if more
financial incentives from Momo can still attract people or if it is excessive and a waste of
financial resources. The results show that all of these three types indirectly affect the
intention to use Momo in Vietnam through Attitude and Subjective Norm. By
understanding this, Momo can assure that the money they have spent and about to spend
on financial incentives for consumers are effective.
1. INTRODUCTION

1.1. A brief view on digital wallet

In the context of the e-commerce market, as consumers have become increasingly

connected via smartphones, tablets and other mobile devices in recent years, mobile
payment has emerged across the world as a new and innovative means for payment and
has begun to replace the old -fashioned credit card (Zhao et al., 2019).
An e-wallet is a virtual wallet that stores payment card information on a computer or
mobile device, to facilitate not only online purchases but also payments at retail
locations. By installing mobile wallet applications in the smartphone, a user can add or
store money in his wallet by directly linking his bank account. Similarly, a user can do
online. This is a type of electronic account used to pay for online transactions, helping
users pay fees on the Internet such as electricity bills, water bills, Internet charges, cable
TV charges, buying airline tickets, consumer loan payments, money transfers, online
shopping, etc.
Some restaurants, cafes, or snack and beverage shops collaborate with several e-wallets
to provide promotion; pricing promotion makes consumers not think long to buy
something (Kusumaningrum & Setiawan, 2021). In the ongoing stressful pandemic
situation, it is necessary to apply remote trading to limit face-to-face contact. Therefore,
the benefits of e-wallets have pushed people to use it more and more popular.

1.2. Digital wallet market in Vietnam

According to statistics of Vietnam Entertainment Technology Company in 2018,

Vietnam has 72% of the population owning a smartphone, 68% using a smartphone to
access the internet (more than a computer). The percentage of consumers paying by
mobile in Vietnam increased from 37% in 2018 to 61% in 2019 and this is also the
highest increase among 6 Southeast Asian countries participating in the survey (Nguyen
Thi Anh Ngoc et al., 2020). In addition, the payment channel via mobile phones grew by
124 - 125% in both quantity and value. In which, payment is still the largest segment,
accounting for 31% of the total number of fintech startups (Baodautu, 2020).
The Asian Banker Research expected that by 2020 in Vietnam, the total number of e-
wallet users is expected to exceed 10 million people. With this potential market, e-wallets
are blooming to dominate the e-commerce market. In fact, in recent years, in the
Vietnamese market, financial technology companies have fiercely competed for this
lucrative market share when launching a series of branded e-wallets such as Momo,
Samsung Pay, VTC Pay, Bankplus, Payoo, Moca, ZaloPay, FPT Wallet, Shopee Pay,
TopPay, AirPay, etc.

Picture 1: Viet Nam market research report: Mobile payment usage in VietNam (Source:
Asia Plus Inc., 2019)

1.2.1. Momo and its dominance

Based on popularity, from subscriber data and market share announced by e-wallet
businesses themselves, Momo is currently the e-wallet with the largest and most popular
market share in Viet Nam. With the strength of convenience and rich ecosystem, Momo -
e-wallet of Online Mobile Services Joint Stock Company is quickly connected by banks.
The appearance of Momo application has lit the first fire for Vietnam's mobile payment
market and is the driving force to attract many domestic and foreign names to jump into
this young and potential market. Momo has been a direct affiliate partner of 16 banks,
only in 2021, Momo e-wallet has 11 million new registered customers and tens of
thousands of businesses join the ecosystem, bringing the total number of Momo wallets
up to 31 million. In terms of transaction volume, Momo has increased more than 3 times
in 2018. Momo has also reached 200 million transactions with a total payment value of
1.2 billion USD / year. Momo is also the largest platform associated with e-commerce
platforms (Lazada, Tiki and Sendo), cinemas, airlines, consumer finance, and insurance.
Momo Wallet users can easily purchase and pay on major e-commerce platforms with
just a few touches with a smooth and convenient experience.
However, regardless of Momo's current leading position in the digital wallet
market in Vietnam, competition from industry rivals and foreign companies might be a
threat for Momo in capturing market share in Vietnam. There is the rise of many digital
wallet companies, which are in the process of “burning money” on promotions to attract
customers. Multiform incentives frequently are the most important factors customers
consider when choosing e-wallet. In Vietnam, previous research on factors affecting
intention to use Momo e-wallet has suggested that Momo should offer more promotion to
strengthen social influence (VĂN SƠN et al., 2021). Another study on the intention to
use Momo wallet also emphasizes the importance of launching diverse promotion
programs for customer attraction and retention (Bùi, 2021). Momo itself also spends
lavishly for people to try their payment system. The report on the future of e-payments in
Vietnam carried out by Cimigo has questioned the effectiveness of these programs for
Momo (Cimigo, 2021).

1.3. Problems Statement and Research Objective

Comprehending the law of Diminishing Marginal Utility, or DMU, is the motive for us to
have the same question with Cimigo. DMU is an economic principle which indicates that
when a person consumes more and more units of a specific thing, the satisfaction from
the successive units decreases (Mankiw, 2017). Economists have long debated the impact
of DMU on money. Some argue that DMU does not significantly affect money, because
as a medium of exchange money can be used to satisfy various demands (Khan, 2021).
However, although financial incentives from Momo can benefit consumers in terms of
money, these types of incentives can only be used within Momo ecosystems. For
example, Momo’s discounted coupon can only be used when consumers pay through
Momo. This limitation imply that financial incentives are not equal to money, and so,
might be effect by the law of DMU.
Consumers today have experienced more monetary benefits than they ever have
before. Indeed, without distance barrier consumers are allowed to compare and buy from
retailers all over the world. This makes the prices retailers offer to consumers in e-
commerce platforms are highly competitive. Besides, E-commerce platforms themselves
also have a lot of incentive programs like free shipping or giving discount vouchers to
prompt consumers into using their platform.
Concerning the effect of DMU and aware that consumers have experienced a
considerable amount of monetary benefit before making it worth carrying out a research
to examine the current effectiveness of Momo financial incentives on Vietnamese
consumers. However, to date, there has been no detailed investigation of the influence of
different types of financial incentives on the intention to use digital wallets in Vietnam.
Hence, this study seeks to obtain data which will help to address these research gaps.

Understanding the effectiveness of financial incentives on the intention to use digital

wallet will help organizations launch promotion programs effectively. If the result show
financial incentives from Momo have no or low impact on the intention to use Momo
digital wallet, Momo should use their financial resource on improving technology and
users’ experiences. In this paper, we use the theory of reasoned action (Fishbein, 1979) in
which the subjective norm and attitudes are the two main factors inducing a person to
conduct a certain behavior.

This paper has been divided into five parts. The next part provides the conceptual
framework and hypotheses. The third chapter is concerned with the methodology used for
this study. In chapter four, we analyze the results of interviews. The conclusion of this
paper is presented in part five.
2. LITERATURE REVIEW

2.1. Digital wallet concept

Digital wallet is a term used in e-commerce transactions. A digital wallet works like a
regular wallet. Digital wallets were initially seen as a method of storing various forms of
electronic money (e-cash), but without much success, it evolved into a service that allows
Internet users to save money. store and use information in buying and selling. The term
“digital wallet” or “e-wallet” is increasingly used to describe mobile phones, especially
those with operating systems, that can store users' confidential information and use
wireless networking technology to conduct transactions (The Economic Times, 2022).

A digital wallet is an online account with an online payment function, which helps
you pay fees on the Internet such as electricity, water, and telecommunications,... The
software provides security and encryption for personal information and actual
transactions. This form of payment is extremely simple, fast, and saves both time and
money. The function of a digital wallet is done by Linking a bank account, depositing
money into the Wallet, and paying for any linked service in a simple and convenient way.

2.2. Financial incentives

Throughout this paper, the term ‘financial incentive’ will refer to the rewards given by
Momo or other digital wallet businesses to consumers under the forms of digital money
or digital discount coupons. In this study, we mention three types of financial incentives
including Cashback, Discount coupons and Affiliate programs.

In marketing terms, the word ‘Cashback’ mentioned in this study refer to

‘Rebates’, or cash refund and ‘Discount coupons’ refer to ‘Coupons’. These two
incentives are considered as consumer promotions, which are tools used by organizations
to boost short-term customer engagement or strengthen long-term customer relationships
(Kotler, 2022). Indeed, Cashback and Discount coupons are the most widely used
incentives for promoting new financial technology and payment processes. In the last
several years, a considerable amount of literature has been published on the impact of
rewards programs on the adoption of cashless payment. In Indonesia, Kusumaningrum
and Setiawan (2021) indicated that factors such as cashback, discount and vouchers
directly induce the adoption of NFC mobile payment. The study from Zhao et al. (2019)
indicated that Cashback and Discount can effective the intention to of digital wallet as
good as it did with credit cards before. In that research, cashback as a types of monetary
incentives were shown to indirectly affect usage intention by lowering the perceived risk.
A study of factors affecting adoption of digital wallets show the importance of financial
incentives as a moderator between attitude and adoption of mobile wallets (Kumar &
Gupta, 2021).

While two incentives above focus on encouraging people making payment with
digital wallet, Affiliate program give an impulse to spread the idea of using digital wallet
within the society. Affiliate programs also known as affiliate marketing, is a form of
marketing to promote products and services of suppliers and manufacturers. In digital
payment context, affiliate participants who are potential online earning partners will
receive a commission when other people register or making payment using Momo digital
wallet. It is an opportunity to make money online by inviting others to use Momo.
Duffy (2004) describing company using affiliate marketing as having a large,
independent, purely commissioned sales force. Indeed, nowadays, affiliate participants
doing great in building their own brand or image on social medias and having influence
on consumers. Hence, by carrying out affiliate program, Momo will attract thousands of
affiliates working for a variety of advertisers at the same time, driving additional traffic
and users in exchange for a commission.
2.3. Theory of Reasoned Actions (TRA)

The Theory of Reasoned Action (TRA) holds that behavioral intentions lead to behavior
and that intentions are determined by individuals' attitudes towards behavior. The TRA
model was proposed in 1975 by Fishbein and Azjen. Among them, attitude and
Subjective norms are important in behavioral intention.
Theory of Reasoned Action is concerned with the behavior of consumers as well
as determining their behavioral propensity, in which behavioral disposition is part of
attitudes towards behavior and partly subjective norms. This model predicts and explains
the tendency to perform better by consumer behavior-oriented than consumer attitude
towards product or service (Mitra Karami, 2006).
Subjective norm can be expounded to mean an individual’s feeling that a large
number of the people to which he holds in high esteem or believes are significant to him
think he ought to or not to execute the act in consideration. Consumer purchasing
decisions are prejudiced by effectual external communication (advertising and
promotion) and internal communication. Many previous studies have found that
subjective norms are one of the influential factors in technology adoptions For example,
in Amoroso and Magnier’s (2012) study, it indicated that subjective norms show a
significant positive relationship towards the adoption of E-wallet in Japan as consumer
think that most people believe that they should apply a designated new technology. In a
more recent study by Slade, Dwivedi, Piercy and Williams (2015), they found that
subjective norms are the most concern toward the intention to adopt e-payment by
nonusers.
Attitude is a subtle way of thinking or feeling about study. Davis (1989) states
attitude is an individual’s positive or negative feelings about performing the target
behavior. However, Vankatesh et al. (2003) states attitudes toward using technology do
not contribute to a significant influence on behavioral intention. By contrast, Chawla and
Joshi (2019) find that attitudes could positively influence the intention in using e-wallet.
Sharma, Malik, and Suresh (2019) state that incentives are an important factor in
influencing consumers' attitude towards their adoption of wallet applications. Sathish,
Sermakani and Sudha (2020) state that users’ trust is the main determinant that directly
affects their satisfaction and intention of adopting a mobile wallet.

2.4. Hypothesis Formation

2.4.1. Cashback

As a form of reward program provided by digital wallet companies, Cashback program

offers wallet users a percentage of digital refund when they meet certain purchase
conditions. Compared to other forms of rewards, Cashback is more convenient due to the
capability of providing constant and certain discounts (Chad Ho et al., 2013). According
to the study on consumer behavior on cashback websites carried out by Ballestar et al.
(2016), cashback increases customers' engagement and interest. Moreover, cashback is an
effective marketing strategy and promotion program, which can lead to brand shifting
and encourage consumers to have the intention to use (Pratika, 2020). Accordingly, the
following hypothesis is proposed:

H1: Cashback positively influences Attitude toward Momo digital wallet

2.4.2. Discount Coupons

Discount coupon is the most used form of vouchers, which allows users to have a certain
discount when they purchase a product or a service (Borrego-Jaraba et al., 2013).
Customers appeared to perceive more net benefit from retailers offering discount coupons
which made them switch from one retailer to the others. Moreover, discount coupons are
also found to help lift customers’ mood (Montazeri et al., 2021). This indicated that
offering discount coupons can help retailers receive a better attitude from customers.
Hence, by offering discount coupons Momo might positively affect consumers' attitude
toward their wallet service. Hence, the following hypothesis is postulated:

H2: Discount coupons positively influences Attitude toward Momo digital wallet

2.4.3. Affiliate program

Affiliate marketing is understood as a part of the process of financial incentive, which is

associated with social relationships through the process of interaction between businesses
and society. Consumers can be benefited from this program by inviting others to use or
purchase businesses’ products or services. Research shows that the outward affiliate
models usually are grouped into three main types: revenue-based model, hybrid models
and exposure-based models, while the others are the shares between partners. Businesses
that link contacts often get more attention from society through effective business
promotion campaigns, thereby creating trust from the community both inside and outside
and creating both profits and the value of the business (Hashem et al., 2020).
Accordingly, the hypothesis below is formed:

H3: Affiliate Program has positive relationship with Subjective Norm

2.4.4. Subjective norm

Subjective norms can be measured and analyzed in terms of expectations set by important
groups (such as family, relatives, and friends) about whether an individual should or
should not, and the subjective norms derived in this way are labeled as social norms, the
opposite of descriptive norms. According to Rivis and Sheeran (2003), subjective norms
are formed when individuals have beliefs and motivations to perform corresponding
behaviors, in which beliefs can be reinforced by social connections. Meanwhile, Icek
Ajzen (1991) believes that personal prejudices are formed mainly by thoughts and self-
assessment of each person's ability, but the results show the impact on the behavior of
individuals when the goal has been identified through suggestions from society or
personal prejudices which prove the relationship between Subjective Norm and
Behavioral Intention.
H4: Subjective Norm has positive relationship with Behavioral Intention

2.4.5. Attitude

As observed from previous studies, The use of e-wallets has created enjoyment,
convenience, saving time for direct transactions and always bringing a sense of security.
It is because of the above factors that have brought about positive attitudes, beliefs, and
good reviews by consumers about using e-wallets (Hale, 2003). This has had more
impact on consumer acceptance and satisfaction. The better the consumer's attitude, the
more likely they are to want to use it. If they feel that using an e-wallet is personally
beneficial, they may intend to engage in the behavior (Fishbein & Ajzen, 1975, p.13).
H5: Attitude positively influences Behavioral Intention toward Momo digital wallet
 Figure 1. Conception model

3. RESEARCH METHODOLOGY

3.1. Research Design

To examine the hypotheses proposed in the previous part, we used primary data collected
from an online survey questionnaire. The questionnaire was originally in English but was
translated into Vietnamese. The items used for each construct in this study were adapted
from previous studies as it shown in the Appendix. There are four items for behavioral
intention, four for subjective norm, three for attitude, three for affiliate programs, three
for cashback and three for discount coupons.
The first part of the survey includes demographic questions like gender, age, income, and
education levels. In the survey’s main part participants were asked to respond using a 5-
point Likert scale ranging from ‘Totally Disagree’ to ‘Totally Agree’.

3.2. Data Collection Method

Online surveys were sent through Email, Facebook, and other platforms from 14th to
18th March 2021. A total of 202 questionnaires were submitted, but after eliminating
substandard responses, only 197 acceptable responses were used for data analysis.

3.3. Population Sample and Analysis Method

To determine an efficient sample size, an online a priori sample size calculator from
‘Danielsoper.com’ were used to examine the anticipated effect size (0.3), the statistical
power levels (0.8), the number of latent constructs (7), the number of observed (20
items), and the desired probability (0.05). The result recommended the minimum sample
size of 161 responses. Hence, our sample size of 197 responses is considered adequate for
structural equation models. The statistical program Smart-PLS 3 was used to analyze the
research data.
4. RESULT AND ANALYSIS

The data table shows that the proportion of men and women participating in the survey is
relatively equal and approximately 50% with an exact percentage of men about 10%
higher than the percentage of women, of which the age group from 18 to 25 accounts for
the majority with the rate up to 68%, of which 90.9% have passed the university training
program, the income of each individual is less than 5 million VND with the rate of
43.6%, but there are also a few individuals with income over 15 million VND with the
rate of about 28.4%, besides, the total income from 5 million to 15 million accounted for
a negligible proportion.

Table 1. Respondents’ profile

Measure Value Frequency Percent

Gender Male 108 54,8%

Female 87 44.2%

Others 2 1.0%

Age Below 18 years 5 2.5%

18 to below 25 134 68.0%

25 to below 35 40 20.3%

45 to below 55 18 9.1%

Education High school 13 6.65%

 University 179 90.9%

Post-graduate 5 2.5%

Income Less than 5 million VND 86 43.6%

5 to below 10 million VND 32 16.2%

10 to below 15 million VND 23 11.6%

Over 15 million VND 56 28.4%

4.1. Measurement model assessment

The criteria we used to evaluate the measurement model are construct reliability,
convergent validity, and discriminant validity. First, the construct reliability was
evaluated using Cronbach’s alpha and composite reliability. Table 2 indicates that all of
the composite reliability are more than 0.7. Moreover, Cronbach's alpha values of all
constructs except Cashback are above 0.7, suggesting that these constructs are reliable.
For Cashback, Cronbach’s alpha at 0.636 is tolerable but making it less reliable than
other constructs. Second, we use indicators’ outer loadings and the average variance
extracted to assess convergent validity. As shown in Table 2, AVE is higher than the
minimum required level of 0.50 and all outer loadings are greater than 0.7, which were
considered to be significant. Third, for evaluating discriminant validity, we made sure
that the square root of each construct’s AVE values is higher than the correlations with
other latent constructs. The data from Table 3 indicate that there is discriminant validity
between all the constructs.
 Figure 2: Measurement Model

Table 2: Reliability and Validity

Table 3: Discriminant validity (Fornell-Larcker criterion)

4.2. Structural model assessment

By bootstrapping 500 samples, we use the P-values to decide if our hypotheses are
acceptable or not. As shown in Table 4, all the hypotheses proposed in this study are
accepted. Specifically, the relationship between Cashback and Attitude was supported (β
= 0.271, P-value = 0.01). The result also states that Discount Coupons positively
influence Attitude (β = 0.542, P-value = 0). These findings are consistent with the
findings of Pinem (2020), which established that Cashback and Discount have positive
influences on the intention to use digital wallets in Indonesia. In addition, Discount
Coupons has higher coefficients compared to Cashback making the result different with
the study of Carbó-Valverde and Liñares-Zegarra (2011)Another type of financial
incentives offered by Momo is Affiliate Programs also shown to have a strong, positive
relationship with Subjective Norm (β = 0.686, P-value = 0). Finally, users’ Attitude and
Subjective Norm are shown to have a significant positive impact on Behavioral Intention
(β = 0.382, P-value = 0; and β = 0.479 , P-value = 0.000, respectively). These findings are
in line with the studies from Bùi (2021), which investigated factors influencing the
intention to use Momo digital wallet in Can Tho city.
Table 4. Results of a structural equation modeling (Hypothesis tests)
5. CONCLUSION

5.1. Summary findings and implications

The aim of this study was to investigate the effectiveness of different types of financial
incentives on consumers’ intention to use Momo digital wallet. Using the Theory of
Reasoned Action, we found two factors, namely Attitudes and Subjective Norm are
factors positively influence on the consumers’ intention to use Momo wallet.
Furthermore, the results show that Cashback and Discount Coupons indirectly induce the
Behavioral Intention by positively affecting consumers’ attitude toward Momo digital
wallet while Affiliate Programs attract consumers by strongly affect their Subjective
Norm. In comparison with Cashback, Discount Coupons seem to be more effective in
attracting consumers, which is contradict with the research from Carbó-Valverde and
Liñares-Zegarra (2011). That research examines the effectiveness of reward programs in
promoting card payment usages and proposed that Cashback are more effective than
Discounts for promoting credit card usage.
In general, therefore, it seems that regardless of its limited usage, financial
incentives from Momo have not been affected by the law of diminishing marginal utility.
From this, the study suggests that Momo should continue carrying out reward and
promotions programs which benefit consumers in terms of money. Especially, Momo
should focus on strengthening the Affiliate Programs since it is significantly affected
people Subjective Norm, which strongly linked to intention to use. Moreover, regarding
the ratio between Cashback and Discount, Momo should prioritize Discount Coupons.

5.2. Limitation and future research

The most important limitation lies in the fact that this study sample includes mostly
people from the age of 18 to 25. Hence, further investigation focus on different age
groups is strongly recommended. Moreover, in terms of discount coupons, this research
is not provide the impact of incentives frequency and is not compare between percentage
and Vietnam Dong amounts discount like Montazeri et al. (2021) did in their study. We
believe the change in these two factors will also drastically affect Vietnamese consumers’
attitude toward the incentive. Therefore, this would be a fruitful area for further work.