Opportunities from e-commerce market

The cross-border e-commerce market in Asia – Pacific, the region with nearly 4.7 billion people or 60% of the world's total population, is entering its golden age. According to data from Google, Temasek and Bain, the digital economy in Southeast Asia will reach 1 trillion USD by 2030. A new report published by Deloitte said that e-commerce in Asia - Pacific is accelerating faster than ever.

Deloitte has classified Vietnam as a developing market besides Thailand, Malaysia, Indonesia and the Philippines. In particular, Vietnam is doing very well in digitization in most aspects of e-commerce, and at the same time leading the trend of digitization in production.

The appearance of the fourth unicorn in Vietnam in late 2021 (Momo) is also a sign of the development of the e-commerce market in general. The common feature of most Vietnamese unicorns is that they all provide payment services, such as VNLife with VNPay wallet, VNG with ZaloPay or Momo with M-Service.

M-service raised funding of 200 million USD from a group of investors led by Mizuho Bank of Japan in December 2021. ZaloPay is in the top three wallets in terms of monthly users and total payment volume. VNPay is a pioneer in the field of payment by QR code in the domestic market.

Waiting for policy

Vietnam is poised to become one of the most competitive fintech markets in Southeast Asia, with more than 80% of the population using mobile phones and a low percentage of people accessing banking services. The policies to promote non-cash payments, e-Government and the target of 80% of adults having a bank account by 2025 have greatly contributed to the development of fintech in Vietnam.

Driven by an influx of venture capital, locally-based startups like Momo or VNG are competing with regional giants like Grab and Sea to become regular choices on consumer phones.

Ms. Trang Bui and Ms. Mai Bui, investment analysts at Insignia Ventures Partners, said that if 2022 opens the door for the boom of fintech in Vietnam, the regulations and legal framework will be the “key” to take the development of this sector in Vietnam beyond small payments.

According to data from investors at Insignia Ventures Partners, as of January 2022, 46 intermediary payment service licenses were issued.

Fintech can be applied in many fields, not only in finance, banking or insurance. About 200 fintech companies in Vietnam are operating in many fields, ranging from payment intermediaries to peer-to-peer lending, blockchain technology, investment, credit scoring and more.

However, this is a new area, so Vietnamese law does not have a complete legal framework, as well as a focal point responsible for synchronous management. Up to now, there have been only initial regulations for payment intermediaries and electronic identification (eKYC).

In 2020, the authorities built a sandbox for fintech, which allows businesses to develop and test new fintech products, services and business models.

It is expected that the draft sandbox for fintech will be released this year, including seven areas such as payment, credit, P2P lending, KYC support, open API, innovative technology application solutions (such as blockchain) and other services supporting banking operations (credit scoring, savings).

Hoang Viet

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