Friday Notes: Timo – The first digital bank in Vietnam

In this episode (FN.002): Timo – the first digital bank in Vietnam

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Below is a transcript of the episode, edited for readability.

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Overview of Timo

Granger: Oh, happy Friday! 

Cameron: Friyay!

Granger: Happy Friday, Cameron William Lynch! How was your week?

Cameron: It was great, Granger Brewster Whitelaw. We know each other’s middle names, so you can tell we’re really close.

Granger: We are very fancy. So, man, it’s been a great week. You were telling me on Monday when we were talking about E-wallet and we were talking about being charged for E-wallets and stuff. That Moca Pay actually does charge you for transactions?

Cameron: Yeah. So if the transaction doesn’t go through, they’ll basically suspend your account. 

Granger: Really? On Grab? I’ve had that happened too. Oh my God! How could they have that type of… Oh, so if you charge on Grab and your charge doesn’t go through to the bank, you can’t charge other Grab until you pay that fee. 

Cameron: Yeah. You just have to top up your balance. And it’s pretty simple in that regard…

Granger: It’s amazing how integrated it is. I mean, it’s interesting to talk about how you use this technology. But again, in Vietnam, where we are, the advancement of the technology in the state of the technology today is really the state of the art. 

Cameron: And they still pay the driver. So, the driver has no problem with that if your transaction doesn’t get through because he still gets paid from Grab. I mean, it makes sense.

Granger: That’s awesome. Yeah. Anyway. All right, so today we’re talking about Timo. I want to talk about Timo because we were speaking about digital wallets, e-banks in the beginning of the week. You are such a fan of Timo since I turned you on to it, I believe. And I love Timo, but today I’m going to really just talk to you about it a little bit. So Timo, for anybody who’s listening right now, was the first digital bank in Vietnam. It was formed in March, 2015 and officially opened the stores in 2016 with the first Timo hangout in Ho Chi Minh City. Pretty cool place on Pasteur street. You could go there and get coffee. 

Cameron: Free coffee, when you open their account! Amazing! 

Granger: Free coffee, free water. It has the little deposit machines there where you can deposit cash, which is pretty unique to Timo because most places you can’t do that. Especially if you’re here as an expat. That’s an issue. And it’s a really cool place to hang out. You got the kind of booth kind of things. You can sit there with your laptop and work if you want. What a great idea for them to do that. It’s a kind of cool and hip place to bank. A really modern, cool digital bank! 

Cameron: Yeah. I mean it’s actually a coffee shop, so you just see people hanging out there all day. So that’s the amazing part. They’ve changed it to not like when you walk into a bank, you sort of come in and out, and you’re no longer happy. You’re in line, and you hate it. You have to be somewhere, and then they close. The only time they’re open is lunch or whatever.

Granger: Well, Timo’s open all the time and they don’t like push a button to give us a sticker or get a number. They take your name, they greet you at the door. I mean, I love the experience since day one.

  • Timo Hangout in Ho Chi Minh City


How is Timo doing in Vietnam?

Granger: I think they signed on about 25,000 customers by the end of 2016 with about $4 million in deposits. That’s pretty fast in under a year. And their average user rate is about 65%. That’s a lot. I mean, you’re actually using it. And I think Cameron Warden, who’s the CEO, was just actually recently talking about that. So that’s a pretty good stats. You want not only people to deposit, but you want them to actually use the services if you’re a banker, right? 

Cameron: I mean, when it comes down to, I’d want to know, okay, so this 25,000 people in this 4 million USD in…?

Granger: 2016. I don’t have recent figures, but it is growing fast. I mean it is one of the fast-expanding banks in Southeast Asia. 

Cameron: I’m just wondering if people actually use it as a primary bank or they use it as a secondary. 

Granger: Well, that’s a good point. But let’s talk about that a little bit. It’s a good question, how do you use it. But you know, they have a lot of different services. They have their Timo app. It’s a really cool little app. They have a place where you go to, in lifestyle, and you can do flight booking You can do overseas transfers with transfers or world remit and orbit remit. Under their wealth section of the app, you can get life insurance. And you can Liberty insurance for a dollar a day for travel insurance. You can get investment products. Now that’s VinaCapital. So this is interesting. VinaCapital, which is Don Lam’s company, as we all know… Was the original group that led the financing for Timo. So, originally I was told Eximbank was going to be the back office. In other words, the bank with the license that you can kind of send a positive swift transfers, all that kind of stuff, give you the security for banking side. But it ended up being VP bank. I think we talked about that. 

Cameron: Yeah, we did. 

Granger: So at the end, VinaCapital is offering investment products. You can get a loan, you can get a Timo Mastercard. I mean there’s a lot of services. And of course, for anybody who doesn’t know it, you can pay bills on Timo. You can go and pay your electricity bills.  You can go pay your gas bills. You can top up your phone. You can do all those types of things off this Timo app as well. 

Cameron: Instead of having to go to a Ministop or a VinMart, you can just do it from the comfort of your home. And then, you can get your Grab delivery food, so you never have to leave your house. 

Granger: Ho Chi Minh City, the place where you never have to leave the house because everything’s cashless. Or it’s going to be soon by 2020, according to the government.


What does Timo stand for?

Granger: How did it get its name? Do you know what Timo stands for?

Cameron: I think it’s like time and money, something like that. 

Granger: Cameron, did you read that before? You’ve cheated! It is time and money, which serves the right purpose of saving time on many transactions and payments. Saving your time and money. I love it. That’s right. That’s what we talked about before. We don’t get charged for withdrawing money like you do in the States or other places that 2 dollars per withdraw… So, think about that for a second. You’re a bank, you make money by the float. The more deposits you have, one of the ways you make money is by holding that money and you have a float and you get paid interest from lending that to the fed, for instance, right?  So if you are charging people 2 or 2.50 dollars per transaction and let’s say, your average guy wants to take out 20 bucks, but they don’t do that because if I take out 20 bucks, I can still pay the same 2 – 2.50 when I take out 100 bucks.  I’m just going to take out 100 bucks. Aren’t you de-incentivizing people to keep money in the bank? Aren’t you actually losing money, potentially, if you’re the bank, by allowing people to, in a use case, actually take out more money from your bank? 

Cameron: Well, I don’t know if they actually looking for just having the massive amounts of deposits. I mean every bank wants it… But Timo, I feel like they’re trying to make this whole ecosystem.

Granger: Let’s not talk about Timo. I’m kind of shifting gears a bit. Say if I’m a banker, if I’m a bank, why would I want to de-incentivize people to keep money in my bank? 

Cameron: Yeah. I mean if you use a VP bank credit, like a withdrawal card, you will still get charged a deposit fee.

Granger: Yolo, their digital card?

Cameron: No, their regular banking card.

Granger: Any regular bank charges you a fee.

Cameron: If you have an expat with a foreign credit card or whatever, and you go to withdraw, you always get charged. 

Granger: Yeah. So, it’s depending on the credit card you have. It’s interesting. We should really do some research on that. I want to research that. And I want to come back and talk to you about that. Let’s think about the banking. How the banks make money? We should have that conversation. And should they even charge fees at all for withdrawing because they’re really de-incentivizing people from keeping money in the bank. You’re talking about millions and millions of people who use ATM every day. I know they’ve got to pay for it, but is it smart to charge that money cause aren’t you really forcing them to take more out? And if you kept in 80% more of the money, what’s the float? It’s a good question, right? I know you’re shaking your head. You’re like: Please pull his hair out. 

Cameron: No, I’ll have some research. Absolutely.

Granger: I don’t think we can say anything more great about Timo. Everyone loves it. I know tons of people are using it now. It’s growing every day. I mean, I think we should be spokespeople for Timo, maybe, right? And we should call and say: Hey, we’re your biggest fans! 

Cameron: The Lotus Talks, sponsored by Timo. Maybe in the future.

Granger: Get us some sponsors, Cameron!

Granger: All right, well, again, we talked about digital banks. We’ve talked about it on Monday and we’ve talked to you about how we use it in our week. So, you know, just to finish off the Friday, getting ready to go and have those beers at Maison. Again, can Vietnam become cashless by 2020? We’re going to talk about that shortly. 

Granger: We love hearing from you. Send us emails, let us know what’s going on, what’s on your mind and what you’d like to think about. 

Granger: That’s all for now. See you on the next episode. Have a nice weekend!

The Lotus Talks is produced by The Vietnam Group. This episode was produced by Granger Whitelaw, Cameron Lynch and Toan Tang.

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