Among the top five fintech firms which account for 90 percent of the market, foreign ownership ranges between 30 and 90 percent, Nghiem Thanh Son, deputy head of the payment department under the State Bank of Vietnam (SBV), said at a forum Tuesday.

Son said that there are concerns that the high rate of foreign ownership can end up market manipulation. Therefore, the SBV is proposing a foreign ownership cap of 30 or 49 percent for fintech firms.

This cap will also apply on indirect ownership via Vietnamese companies, he added.

But experts are concerned that this proposal could limit the development of fintech firms.

Phung Anh Tuan, general secretary of the Vietnam Association of Financial Investors (VAFI), said that fintech firms need capital to expand, and without foreign investors, they will struggle to find money.

This proposal contradicts the current policy for banks, as the government has already allowed wholly-owned foreign banks to operate, and is considering expanding room for foreign ownership in commercial banks, he said.

Foreign ownership is capped at 30 percent at Vietnamese commercial banks, but exceptions are allowed. For "weak banks" as labeled by the SBV, foreign ownership can be 100 percent subject to the prime ministerial approval on a case by case basis.

Varun Mittal, a founding member of the Singapore FinTech Association, said that a more relaxed policy is needed to help Vietnamese fintech firms reach out to the region.

Fintech startups have a lot of ambitions and they need more capital to grow faster, he added.

In June, the American Chamber of Commerce (AmCham) Vietnam said it was against a foreign ownership cap at fintech firms for similar reasons.

Vietnam has seen robust expansion of fintech companies in recent years as the government encourages cashless transactions. There were 27 e-wallets operating in Vietnam at the end of the first quarter, according to the SBV.

The country’s fintech market was valued at $4.4 billion in 2017 and is estimated to reach $7.8 billion in 2020, according to market research firm Solidiance.

Fintech startups received the highest investment among all categories last year with eight deals worth $117 million, according to startup accelerator program Topica Founder Institute (TFI).