Market Intelligence
Information and Communication Technology Vietnam Market Access

Vietnam Fintech

Vietnam’s FinTech industry which emerged in 2008 has seen strong growth through three segments: (1) online payment, (2) peer-to-peer lending, and (3) crowd-funding. Wealth management, liquidity management, investment management, and automated finance consultancy are at the early stage of development.

Vietnam’s fintech market reached a transaction value of USD $4.4 billion in 2017, and is forecast to reach USD $7.8 billion in 2020, according to Solidiance, representing an average growth rate of approximately 25% per annum.

The country’s fintech market has three main product segments: 1) Digital Payment; 2) Personal Finance; and, 3) Corporate Finance. According to Solidance, the segment of Digital Payment (including mobile payment and payments platforms) accounted for 89% of the fintech market in 2017, Personal Finance 9%, and Corporate Finance 2%. A recent report by the consulting firm shows the Digital Payments segment will grow at a rate of almost 13 percent per year, with Personal Finance and Corporate Finance growing at approximately 31 percent and 35 percent respectively through 2025.

Main drivers of this robust growth include progressive government policies, increased middle-income, tech-savvy class, and a fast-growing internet economy. The Government of Vietnam has been actively promoting a non-cash payment society towards the goal of reducing cash transactions to below 10 percent of all payments and reaching 70 percent of the banking population by 2020.

The middle-income class in Vietnam has been growing steadily over the past eight years and accounted for 16.3% of the population in 2018. The strong growth of the middle-income class brings an increase of disposable income that is expected to spur domestic consumption via digital payment platforms.

Vietnam’s internet economy is booming due to fast growing internet and smart phone penetration. A recent report by Google and Temasek shows that Vietnam’s internet economy was estimated to reach USD $12 billion in 2019, accounting for 5 percent of the country’s GDP and is projected to reach USD $43 billion by 2025. The high penetration of internet and smart phone usage encourages and supports these growth projections in e-commerce.

According to the Institute for Development and Research in Banking Technology of Vietnam National University Ho Chi Minh City (VNUHCMC-IBT), there were approximately 154 fintech firms operating in Vietnam as of October 2019. Roughly 70 percent have international ownership, including from Australia, Canada, Denmark, France, Japan, the U.K, and the United States.

A report by VNUHCMC-IBT shows that there are 37 firms operating in the segment of Online Payment services, 25 firms Peer-to-Peer Lending, and 22 firms in Blockchain, Cryptocurrency and Remittances.

One of the leading digital payment service providers, Momo, recently received an investment of almost USD $34 million from Goldman Sachs and Standard Chartered Bank. Other major service providers include VNPay, Moca, GrabPay, 123Pay, Bao Kim, Ngan Luong, and Payoo. Some of leading peer-to-peer lending service providers include Tima, Vay Muon and Growth Wealth.
In the segment of blockchain and cryptocurrency, main service providers include TomoChain and Kyber Network.

Vietnam’s fast-growing fintech market holds market potential for suppliers of the following technology solutions:

  • Digital Banking
  • Digital Payments
  • Cybersecurity
  • Blockchain and Cryptography

One key challenge facing the country’s fintech market is a lack of a supportive regulatory framework. Per Circular 19 issued by State Bank of Vietnam in June 2016, National Payment Corporation of Vietnam (NAPAS) is designated as the sole intermediary payment service provider, thus limiting the progress of fintech and e-commerce innovation in Vietnam. In the meantime, one main impediment to the growth of peer-to-peer lending is that only banks and credit institutions in Vietnam are legally permitted to operate in the lending business.

U.S. companies interested in doing business in Vietnam’s fintech market are advised to:

  • Study the market potential and regulatory framework for their products or services;
  • Find the right local business partner(s) with suitable commercial and technical capabilities; and,
  • Closely monitor their intellectual property

 For more information contact Ngoc.Nguyen@trade.gov.