With the development of the global economy, more and more companies are expanding their markets overseas. According to Research by Solidiance, an Asia-Pacific consulting firm, Vietnam’s fintech market will exceed USD 7.8 billion by 2020.
In the first four months of this year, mobile payment transactions and transactions in Vietnam increased 189% and 166.1%, respectively, according to statistics released by Vietnam. According to the analysis, the increasing popularity of smartphones and the high proportion of young people are the basis for the rapid growth of mobile payments in Vietnam.
By the end of last year, 78 institutions in Vietnam had been approved for online payment and 49 for mobile payment, of which 26 offered e-wallet services. Twenty-six of them already offer e-wallet services that allow users to charge their mobile phones, pay electricity bills and pay for two-dimensional codes. In 2019, Vietnam Mobile’s payment transactions totaled 418 million, an increase of 198% a year, with transactions amounting to 2.192 trillion dong (1.23 million U.S. dollars), an increase of 210% in the year.
According to a PWC report, Vietnam is among the leading emerging market economies in mobile payment growth. Backbase, a digital banking company, predicts that Vietnam’s mobile payments will grow by 400% by 2025.
According to Allied Market Research, Vietnam’s mobile payment Market could reach $70,937,000 by 2025, with a cAGR of 18.2% between 2018 and 2025.
According to the government’s cashless payment development plan launched in 2016, Vietnam plans to reduce cash payments to 10 per cent of total payments by the end of 2020 and a further 8 per cent by the end of 2025. To achieve this, Vietnam is gradually liberalizing restrictions on institutions developing mobile payment services. Currently, the five major mobile payment platforms in Vietnam, which account for 90% of the mobile payment market share, are all foreign-invested, with the shareholding ratio between 30% and 90%.
In the context of the complex and unpredictable COVID-19 epidemic, there is an opportunity to activate the development of non-cash payment services.
Currently, in order to reduce the risk of the spread of COVID-19, mobile payment and transaction channels have replaced cash transactions and become more convenient, secure and suitable for a large number of users.
Recently, a number of Vietnamese banks and fintech companies have also launched a series of electronic payment incentives to help companies get rid of the negative effects of the new Coronapneumonia virus at an early stage. The process and the ability to promote electronic payments have become and will become an effective support tool.
Fintech companies are also important drivers of mobile payments in Vietnam. Over the past four years, the number of Vietnamese fintech companies has increased from 40 to 150, and new products have been incubated to pre-empt the market. It is understood that nearly 30 mobile payment platforms have appeared in the Vietnamese market.
Vietnam’s fast-growing mobile payment market is also facing some problems.
Taking Vietnam’s third-party payment as an example, the majority of third-party payment apps have the following problems: Some payment apps often fail to register, which makes it difficult to obtain data information and authentication. High commission fee; The recharge system is unstable; Most payment channels allow users to get refunds, advance payments and pay by credit card, creating a bad-debt problem.
In addition, the National Bank of Vietnam currently requires that e-wallets be linked to domestic bank accounts, while in rural areas, where about 65 percent of the population is affected, the proportion of people opening bank accounts is small.
Some industry insiders have suggested to the government that the compatibility of mobile payment tools should be improved at the national level, while the limit of transaction amount should be relaxed and the convenience of payment in rural areas should be taken into account.