Convergence of Financial Technology (FinTech) and Payments in Vietnam

Vietnam's financial technology (FinTech) and payments industry is experiencing rapid convergence, a trend driven by a combination of technological advances, policy support and market demand. Below is an analysis of the key points:

1. Market context and drivers

• High Internet penetration: About 73% of Vietnam's population use the internet and smartphone penetration is 75%, laying the foundation for mobile payments.
• Structure of the young population:: 70% The population is under 35 years old and highly receptive to digital financial services.
• Policy support: The Government of Vietnam launched the National FinTech Development Strategy to 2025 to encourage cashless payments and financial innovation.

2. Main areas of integration

(1) Explosive growth of e-wallets

• player who is head of the game::
  • MoMo (over 30 million users): integrates money transfers, bill payments, e-commerce and more.
  • ZaloPay (based on the social platform Zalo): penetration of payments through social scenarios.
  • Viettel Pay (telecom operator background): taking advantage of offline outlets.
• Scenario Expansion: Expanding from P2P transfers to retail, utility payments and even education and healthcare.

(2) Standardisation of QR Code payments

• The State Bank of Vietnam (SBV) promotes the harmonisation of QR standards (VietQR) to enable interoperability across banks and e-wallets and reduce merchant access costs.

(3) The rise of BNPL (buy now pay later)

• Platforms such as Fundiin and Kredivo have partnered with e-commerce companies (e.g. Shopee, Tiki) to target the credit needs of young consumers.

(4) Open Banking Takes Shape

• SBV plans to launch an open API framework to allow third-party developers to access bank data, potentially spawning aggregated payments and personal finance management applications in the future.

3. Regulatory developments and challenges

3. Regulatory developments and challenges (continued)

(1) Progressive improvement of the regulatory framework

• Payment Licence Tightening: The State Bank of Vietnam (SBV) requires e-wallets and payment intermediaries to be licensed and raises capital thresholds (e.g. MoMo needs to maintain a minimum of VND50 billion, which is about US$2 million).
• Anti-Money Laundering (AML) Enhancement: The amended Anti-Money Laundering Act, 2021, requires payment platforms to KYC users' real names and limit anonymous transactions.
• Cross-border payment controls: Foreign payment platforms (e.g. Alipay, WeChat Pay) need to co-operate with local banks in order to provide the service and prevent outflow of funds.

(2) Main challenges

• Cash dependency inertia: Despite the rapid growth of cashless payments, cash still accounts for 80% of daily transactions (especially in rural areas).
• Single Profit Model: E-wallets rely heavily on transfer fees and merchant commissions, which are highly competitive and lead to thin margins.
• Data security risks: 2023 saw a number of e-wallet fraud cases (e.g., fake QR codes, phishing apps), and user trust was shaken.

4. Future trends and opportunities

(1) Super App Eco-Expansion

• MoMo, ZaloPay, etc. are transforming from "pure payment tools" to integrated service platforms, integrating loan, insurance, investment, etc. (similar to Alipay in China). For example:
  • MoMo launches "MoMo Invest" to offer fund products;
  • Viettel Pay goes live with microinsurance service.

(2) Deepening AI and Big Data Applications

• Credit Scoring Innovation: Inadequate coverage of traditional banking data, FinTech companies use alternative data such as telecom records and e-commerce behaviour to assess credit risk.
• case (law): Home Credit issues consumer loans by analysing the length of mobile phone usage and repayment history.

(3) Breakthrough in cross-border payments

• ASEAN regional cooperation accelerated:
  • Vietnam joined the ASEAN QR Code Interoperability Programme (mutual payment scanning with Thailand and Malaysia);
  • Pilot projects test blockchain cross-border settlements (e.g. Ubin in Singapore with Project Cedar in Vietnam).

[Key summary] Specificities of the Vietnamese market

Implications for businesses or investors:
✅ Prefer models with local partners;
✅ Focus on rural financial inclusion scenarios (digitisation of agricultural chains);
✅ Compliance costs are a long-term investment priority.