A recent report stated that Vietnam’s fintech market could grow to US$ 18 billion by 2024. The country is a leader among ASEAN members in terms of the volume of financing for fintech, second only to Singapore.
Over 93% of all venture investments in the country are directed at e-wallets and the e-money segment. The total number of fintech companies has grown to 97 since 2016, an 84.5% increase. However, the number of newly-launched start-ups each year decreased from 11 to 2. The market features high competitiveness and a high entry bar. Transaction volume has seen a 152.8% growth since 2016, with 29.5 million new fintech users. As a result, every second Vietnamese citizen uses at least one fintech service. Demand for digital services (transactions, payments, and wallets) in the country is high. According to industry analysts, Vietnam fintech sector is young and promising. The market valuation has increased from US$ 0.7 billion to US$ 4.5 billion since 2016.
The government will become more involved in fintech, evidenced by the growing favourable legislation for financial technologies. The fintech regulatory sandbox and the legal framework for digital assets and cryptocurrencies will also further developments in the industry.
Data from a recent report showed that the global fintech market size was US$ 110.57 billion in 2020 and is estimated will grow to US$ 698.48 billion by 2030, growing at a CAGR of 20.3% from 2021 to 2030. Fintech increases the speed, transparency, and security of transactions, which is why governments and organisations around the world are investing in the sector. For example, investment in UK fintech was seven times higher in 2021 than in the previous year, boosted by a record number of deals.
In May, OpenGov Asia reported that the Vietnamese government targets that by 2025, the volume of mobile payment transactions will grow by 50-80% while transaction value will surge by 80%-100% annually. It also aims for at least 80% of the population aged 15 and above to have bank accounts, the number of Internet payments to increase by 35%-40% annually, and the rate of individuals and organisations using cashless payments to reach 40%.
Cashless payment methods like contactless cards, QR codes, and mobile banking for digital and e-commerce services are becoming increasingly popular in Vietnam, especially among young people. The country has witnessed a strong shift to electronic payment methods replacing cash, which is also a target of a plan for cashless payment development in Vietnam for the 2021-2025 period, Tuyen noted.
The plan has four major objectives. Firstly, the project aims to make non-cash payments a norm in urban areas and expand their coverage in rural areas. Secondly, it seeks to develop a safe non-cash payment infrastructure with various conveniences and facilities to meet the rising demand of firms and individuals. Thirdly, it strives to enhance the security and transparency of cashless payments, allowing authorities to better monitor economic transactions in the country. Lastly, it aims to realise growth targets set for non-cash payments in the short term, including 50% of transactions on e-commerce platforms being conducted through cashless payment methods.
