Vietnamese Fintechs targeting at $35b pie

26-Jul-2017 Intellasia | Bao Dau Tu | 6:00 AM Print This Post

It takes less than five seconds to select a drink, scan the card, push the button from the automatic vending machine to have a cool drink. The QR code-based vending machine, which is integrated into Zalo Pay mobile payment service, attracted thousands of visitors at ICT Comm Vietnam exhibition.

The ground floor of The Flemington Tower (182 Le Dai Hanh, Ward 15, District 11, HCM City) where VNGthe “father” of two applications Finax Zalo Pay and 123Pay locates its headquarterthe QR code payment machines Zalo Pay is also surrounded by young users.

However, machines using QR code like this in HCM City in general and Vietnam in particular are not many while thousands of ATM card machines still flourish all over the streets in the country.

Meanwhile, in India, people go to the market to buy vegetables and make payment by phone via Paytm wallet or in Sweden, homeless people who sell newspapers can now receive money by scanning credit card, or receiving SMS.

Even in China, many beggars receive money via QP Code and in the neighbouring country Cambodia, people can pay taxes to the State through more than 5,000 agents of fintech wing service. Nearly $53 billion has been spent on Fintech companies, and there are more than 3,500 Fintechs in the world now, according to the Boston Consulting Group.

Vietnam Fintech market is on the threshold of a very potential land. As per Zion Co., Ltd (an intermediary payment unit with products of 123Pay and Zalo Pay e-wallet), Vietnam currently has 40 million smartphones, and this number will increase to 60 million in 2018. More than 500,000 business accounts on Facebook have not yet met payment demand but currently only less than five percent of Mobile users use banking applications.

Zion also said that up to 50 million ATM cards are being used in Vietnam, including eight million international Visa cards (up to 95 percent are used for cash withdrawal, only five percent are used for POS). The ratio of cash payment in Vietnam amounts to 90 percent.

Apart from VNG which has just “entered” this market, other technology groups, start-ups have also entered the market vigorously such as VNPT’s Momo e-wallet and VNPT EPay, VTC’s VTC Pay, Viettel’s BankPlus, VietUnion and NTT Data (Japan)’s Payoo, Alibaba’s AliPay, etc. which have created an exciting “wave” in sharing the “sweet cake” in electronic payment.

Nguyen Hoa Binh, Founder and Chair of NextTech Group of Technopreneurs (the developer of many payment applications such as,,, etc.) said a large number of consumers, which account for 70-80 percent of the population in newly developing countries like Vietnam, are staying outside the coverage of banks. This is an opportunity for many Fintech companies to fill the gap or replace banks to serve these objects.

Truong Cam Thanh, director of Zion, said that Vietnam’s new Fintech market is quite potential. In fact, the ratio of people using electronic payment is still very low due to many reasons such as habits of using cash; people do not really trust the security and safety of electronic transactions; the registration of non-cash payment services is not convenient; many concepts are confusing for users and e-commerce service providers still maintain the payment form of COD.

“The ratio of people using electronic payment is currently still very low, but I believe that when customers use it as a payment habit, electronic payment services will develop very quickly”, said Thanh.

As per reports by the United Nations and Banknet, the Vietnamese market has as much as $35 billion with small transfers of less than five million dong a year, and this is really Fintech’s fertile land. That is the reason why 123Pay payment gateway has been selected by more than 200 companies with diversified business lines such as retail (Lazada, Mobile World, Nguyen Kim Electronics Supermarket, etc.); tourism (Vietravel, BenThanh Tourist, etc.), entertainment (Galaxy Cinema, BHD, 123Phim, etc.) to be partners.

And, revenue through 123Pay payment gateway in 2015, before receiving the paper to provide intermediary payment services, electronic payment, collection and payment services, e-wallet service only reached 850 billion dong then in 2016, it grew 60 percent compared to 2015 and reached nearly two trillion dong.

Zalo Pay, after the impressive show at ICT Comm Vietnam 2017 exhibition and successful pilot in HCM City, has received many invitations to cooperate from many business partners in supermarkets, convenience stores, restaurant chains, parking lots, toll booths, hospitals, schools, etc. interested in the widespread implementation of this technology. It is expected to be carried out this year in HCM City, Hanoi and Da Nang.

Zalo Pay, by integrating 70 million Zalo chat users and targeting at 20 million digital content customers will really be a formidable rival for 30 Fintech companies in Vietnam, two thirds of which offer mobile payment services.

VNG also said it is focusing on developing Zalo Pay products and sets the target that after five more years, Zalo Pay can completely replace cash in every transaction in major cities in Vietnam.

Currently, Fintech in Vietnam is being facilitated to develop. Most recently, the State Bank of Vietnam (SBV) established the Steering Committee on Financial Technology to advise and propose to the Governor measures to improve the ecology, including the improvement of legal framework to facilitate the development of Fintech businesses in Vietnam, in accordance with the guidelines and directions of the government.

Earlier, grasping the trend of the industrial revolution 4.0 in the field of non-cash payment, the SBV also advised and the prime minister issued the Decision No.2545/QD-TTg on “Development of non-cash payment in Vietnam in the period of 20162020″. Of which, the scheme focuses on the development of electronic payment and targets that by the end of 2020, the proportion of cash out of the total money supply will be less than 10 percent.

The above mentioned moves show that the intermediary payment activity (electronic payment gateway, collection and payment support, electronic money transfer support, electronic wallet) is being facilitated to develop and it is very likely that in the near future, technology giants will launch a series of fintech products to compete in the $35 billion market.

A survey conducted by PricewaterhouseCoopers(PwC) in 2016 showed that 83 percent of traditional financial businesses said that part of the business operation was at risk of falling into Fintech’s hands, especially in the banking sector. Money transfer and payment companies in the next five years may lose 28 percent of market share to Fintech compared to 24 percent in banks; 22 percent in the asset management sector and 21 percent in the insurance sector if there is no change to catch up with competitive trend.


Category: Finance

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