Vietnam Fintech Market Picture
In recent years, Asia Pacific has become a promising Fintech region with a market size of 74 billion Euros, forecasted to reach 96 billion Euros by 2024.
Vietnam is one of the emerging regions of Fintech, very vibrant and promising many breakthroughs. With support from the Government, the potential to attract foreign investment, the FinTech market is growing rapidly in Vietnam, both in terms of investment amount and quantity. New Fintech Company , increased by 170% from 2017 to 2020. There are now more than 130 FinTech startups serving services: digital payments, alternative finance, asset management and blockchain,…
Main Fintech products in Vietnam market
Digital Payments
This is one of the most popular forms of Fintech in Vietnam. Cash transactions are decreasing, replaced by digital payment transactions. The digital form of payment is shown in online purchases (online payment) or payment at POS (customers can easily swipe their cards to pay), e-wallets. Fintech companies will take on the role of building payment gateway systems for these virtual transactions.
VISA said Vietnam is using a number of electronic payment methods, such as: contactless cards accounting for 7%; contact card payments accounting for 8%; QR code payments accounting for 7%; contactless mobile payments accounting for 5%; online card payments accounting for 7%; online e-wallet payments accounting for 15%.
Reference: VISA Consumer Payment Attitudes Study 2021 Report
Personal Finance
Perhaps when it comes to money transfer transactions via internet banking, it will no longer be strange to Vietnamese people. It even plays an indispensable role in many transactions. However, the product of personal financial Fintech also exists under another service, which is Digital Asset Management. This feature will be integrated into the internet banking apps of many banks. With this module, users will divide their assets into different groups of purposes such as: money to buy a car, money to pay for children's education, savings, ... to easily manage spending.
In addition, internet banking apps also apply smart investment modules for idle money. These two types of digital asset management are quite new in Vietnam, but are still forecasted to be promising products in a young market.
For example, in 2021, Vietnamese fintech startup Infina raised $2 million in funding from five global venture capitalists: Japan’s Saison Capital, Indonesia’s Venturra Discovery, Singapore’s 1982 Ventures, the U.S.’s 500 Startups, and South Korea’s Nextrans. The startup has developed an investment app called Infina that allows users to make term deposits, invest in certificates of deposit, and trade currencies. Most users are between the ages of 25 and 40 and are looking for alternatives to investing in long-term assets like real estate.
Insurance Technology
Insurance is a passive product and Vietnamese people still have a rather “cautious” view of this product. Because it is a passive product, customers need a long time to research and make a decision. They do not want to be bothered, do not want to buy insurance when they are not really ready.
Therefore, e-Insurance products were born as a solution for buyers to proactively approach this product. They have enough time to research, compare and consider whether they are ready to buy this product. When coming to a decision, buyers can easily buy life/non-life insurance voluntarily and happily. Buying insurance online also helps to significantly reduce the process and paperwork for both buyers and sellers.
Alternative Finance
This product exists in the form of: P2P lending (Peer to Peer Lending), lending to small and medium enterprises, crowdfunding. Fintech companies will act as a bridge to help borrowers and lenders meet, ensure conditions for information verification, loan application appraisal, loan recovery when due, and guarantee capital and interest for investors. Currently, this form of financial technology is still quite new in Vietnam, but has initially attracted the attention of businesses.
E-wallet is the most prominent field in Vietnam's Fintech industry
With the development of e-commerce in Vietnam , digital payments are quickly becoming an integral part of the economy. In recent years, Vietnam has recorded a significant increase in transaction value from e-wallets and digital banking, and there are no signs of slowing down.
Vietnam has consistently been among the top countries in cryptocurrency adoption over the past few years, surpassing most countries in terms of peer-to-peer transaction value and person-to-person payments. According to Statista’s Global Consumer Survey, around 27% Vietnamese respondents said they owned or used an e-wallet.
The young population is an advantage of Vietnam for the rapid development of Fintech. A generation of GenZ is significantly changing the consumption landscape. Young people are open to new things and quick to apply. E-wallets are proving their appeal to the young generation of Vietnam with promotions, discount codes and are present everywhere from luxury shopping malls to street vendors. Up to 77% people surveyed use e-wallets weekly, 30% use them daily.
You may be interested in: Download Report on E-Wallet Market in Vietnam
Fintech Trends in Vietnam
Vietnam has become a top investment-attracting country in Asia, with stable GDP growth despite fluctuations from the pandemic, the rate of internet users is constantly increasing (reaching 70.3% in 2021), banks are accelerating digital promotion, etc., which has created an extremely favorable context for the Fintech industry to develop.
In which digital payment will be the main product dominating the market. E-wallet will account for the largest user structure, followed by POS payment.
Insurance Technology products are also a highlight in the next few years. Meanwhile, personal financial management will begin to attract the attention of investors and users. In general, the potential of Fintech in Vietnam is still very fertile to exploit. With support from the Government, GDP growth rate and young population structure are the bright spots promoting domestic Fintech startups as well as attracting foreign investment.
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