E-payments in Vietnam: an emerging market with great potential.
At 94.9M, Vietnam's population is 3 times larger than the South-Eastern Asia median (30.3M) and 17 times larger than the world median (5.37M). With a population density of 295.75 people per sq km, Vietnam is 3.4 times more dense than the world median (86.2 people per sq km).Vietnam’s fintech industry is still in its infancy with a little more than 40 players who are mostly tackling the payments market.
Two thirds of Vietnam’s fintech startups are providing consumers and merchants with, either, online payments services (1Pay, 123Pay, Payoo, VinaPay, OnePay, MoMo, etc.), or, brick-and-mortar digital payments solutions and POS/MOS (ibox, Moca, etc.).
At 94.9M, Vietnam's population is 3 times larger than the South-Eastern Asia median (30.3M) and 17 times larger than the world median (5.37M). With a population density of 295.75 people per sq km, Vietnam is 3.4 times more dense than the world median (86.2 people per sq km).
The majority of Vietnam's population lives in rural areas. As of 2015, 66.41% of the population is living in a rural area which is 10.8% higher than other countries in South-Eastern Asia (55.6%).
Average Technological Prevalence
53 per 100 Vietnamese have used the Internet in the past 12 months. Vietnam is approximately in line with the global median of internet users (49.84 per 100 people).
Cell phone use is popular, with 131 plans per 100 people. This is 23 subscriptions above the global median (108 plans per 100 people).
Internet Users per 100 People
South-Eastern Asia Rank: 4th of 11 countries
Worldwide Rank: 97th
Ranked from Highest Number of Internet Users
Mobile Subscriptions per 100 People
South-Eastern Asia Rank: 5th of 11 countries
Worldwide Rank: 50th
53 per 100 Vietnamese have used the Internet in the past 12 months. Vietnam is approximately in line with the global median of internet users (49.84 per 100 people).
Cell phone use is popular, with 131 plans per 100 people. This is 23 subscriptions above the global median (108 plans per 100 people).
On Online Friday 2015, the form of COD payment still accounted for the highest proportion (73%), followed by bank transfer (13.4%). The proportion of online payment was 10% (in which 6.5% via domestic card and 3.5% via international card) and payment via mobile devices accounted for 1%.
In 2015, the proportion of enterprises accepting payment cards was 16%. This proportion did not changed significantly compared with the previous year. The form of payment via e-wallet accounted for only 4% of enterprises and there was no sign of obvious change.
The development of e-payment will enhance the development of the economy and e-commerce. Several studies indicate that the wide use of online payment has added $983 billion to the value of the global economy in the period of 2008 – 2012 and contributed 0.8% of GDP in the emerging markets. Although the proportion of e-payment is low at present but Vietnam was assessed to be one of the most potential markets for e-payment compared with other countries in Asia due to large consumption, fast-growing population and economy, majority of people still using cash for payment. In contrast, the growing demand of online shopping will create the motivation for developing electronic payment.
Vietnam’s fintech industry is still in its infancy with a little more than 40 players who are mostly tackling the payments market.
Two thirds of Vietnam’s fintech startups are providing consumers and merchants with, either, online payments services (1Pay, 123Pay, Payoo, VinaPay, OnePay, MoMo, etc.), or, brick-and-mortar digital payments solutions and POS/MOS (ibox, Moca, etc.).
The appetence for online payments and digital wallets in Vietnam is no surprise since Southeast Asia is expected to see its e-commerce market boom in the next decade.
Not all of them are offering payment-related products and services. Vietnam has also a number of ventures that are tackling all kinds of sub-segments including crowd-funding, with players such FundStart, Comicola, Betado, and Firststep; lending with LoanVi; data management with CircleBi; personal finance, with the likes of BankGo, MoneyLover and Mobivi; bitcoin with Bitcoin Vietnam; and banking, with Timo, the country’s first digital bank.
There are 22 fintech companies in payment sector. They provide payment services through Bank account, mobile Sms, API OTP. The development of technology, internet, mobile have promoted the development of online payment.
Vietnam has a rapidly growing number of app developers - these are the people who design and create the apps distributed domestically and internationally. Moreover, Vietnamese companies that do app development also have to hire sales people, project managers, database programmers and other types of workers.
In VietNam, payment through mobile sms has been become favorite payment method for 70% of population in VietNam, who doesn’t have bank account.
There is only firm in VietNam provides lending service. Huydong.com (also known as LoanVi) an online peer-to-peer lending platform for personal loans in VietNam. Founded in 2015, the startup aims at bridging the gap between underbanked individuals and investors by creating an accessible channel for individuals to acquire loan financing and for investors to earn solid fixed-income returns. As Uber, grap, HuyDong.com is kind of sharing economic. They use technology to operate an online platform that connect people who need a loan with people who have money to lend. Users interested in a loan can submit an application, while investors can select in which loan to invest and earn monthly returns. The entire process is online, hassle-free and transparent
Bankgo is a financial comparison platform for personal loans (housing, car, consumer loans) and credit cards in Vietnam. Through BankGo, Borrowers can be able to borrow money from Banks more easily to buy house/ car/ consumer products with best interest rate as well as other loan conditions.
This is a market of $15.12billions sales volume in Vietnam in 2015 (consumer loans only, data from Vietnam Consumer Finance Market Report 2015 by StoxPlus). BankGo is a kind of online selling arm for Banks and gets commission fee on the successful loan applications/ new credit cards from Banks, it is free for Borrowers.
BankGo helps Borrowers to search, compare, recommend Banks with best interest rate as well as other loan conditions and then connect them to apply loan with Banks. While Banks cooperate with BankGo to get qualified loan applications and more new Borrowers.
Fundstart, Comicola, Betado,Firststep are crowd funding firms in VietNam. While Fundstart and Comicola are support for art, Betado and Firststep are aim to raise fund from crowd for startup.
Fundstart “turning dreams into reality with funds coming from community” Fundstart seeks to allow the community to fund the best projects to support and project owners to engagers with backers and get media attention to reach success. Comicola is a crowdfunding platform in the cartoon industry. The company has its own website and a distribution system which is teeming with activities to engage young artists, writers, and readers.
Comicola, which also offers courses in applied comic art in Vietnam, has forged increasing partnerships with local artists and comic illustrators.
In the contract, Betado and Firststep, they seek to allow the community to find the best startup to support.
Bitcoin is a crypto currency and a payment system. The system is peer-to-peer and transactions take place between users directly, without an intermediary .These transactions are verified by network nodes and recorded in a public distributed ledger called the block chain, which uses bitcoin as its unit of account. Since the system works without a central repository or single administrator, the U.S. Treasury categorizes bitcoin as a decentralized virtual currency. Bitcoin is often called the first crypto currency although prior systems existed and it is more correctly described as the first decentralized digital currency. Bitcoin is the largest of its kind in terms of total market value.
In VietNam, Cash2vn, Bitcoin VietNam and VBTC bitcoin are firms which provides Bitcoin and BlockChain.
CircleBi and Trusting Social are analytics app focusing on cash-flow for Startup and SMEs. Founders use it to get quick insight about their startup finance and optimize every penny they put in.
MoneyLover, Timo and Mobivi are fintech companies work on personal finance.
While, MoneyLover is a finance management applications that allow users to track their expenses over time and manage their monthly and annual budget, TiMo is the 1st digital bank in Vietnam, Timo offers a variety of banking services, such as money transfer, bill payment, savings, … Powered by VP bank, Timo has a strategy to re-invent the banking industry. Timo brings a 100% free services to end-users with an idea of creative Banking experience.
Mobivi is a financial services company, providing transactions solution to banks, individual users and corporate clients.
Hottab is a startup that offers a new solution for Point of Sale management for F&B business. Hottab provides service tablets and POS system for food and beverage (F&B) businesses. A cloud-based system connects all devices using Hottab. It includes an application installed on tablet devices that allow waiters to create new orders. It also enables customers to self-order at the table.
Ibox, in South-East Asia and Russia, set to revolutionize the global payments market. With Ibox solution, merchant accept credit and debit cards, using their smartphones or tablets, in a simple, secure and cost-effective way. Ibox expanded into 5 Countries across South-East Asia. The company has major offices Hong Kong, Hanoi, Bangkok, Jakarta and Moscow.
