A typical characteristic of the 4.0 industry revolution is the faster diffusion and larger coverage of new technologies, as well as the higher speed in realizing innovative ideas.

A survey conducted by Solidiance, a consultancy firm, showed that Vietnam’s fintech market value hit $4.4 billion in 2017 and the figure will rise to $7.8 billion by 2020. Two thirds of fintech startups in Vietnam provide online payment instruments, POS/mPOS digital payment solutions and money transfer.

According to Ernst & Young, MoMo is leading the fintech market in Vietnam. It has received $33.75 million worth of investment from Goldman Sachs and Standard Chartered.

The other well known names include VnPay, 123Pay, Bao Kim, Ngan Luong, OnePay and Payoo with the total number of users estimated at 48 million.

Predicting high growth rate of e-payment, Statista believes that the total value of e-payment transactions by 2022 will reach $12.33 billion.

The biggest advantage of the fintechs is the application of modern technology. However, commercial banks such as BIDV, VietinBank, VP Bank and TP Bank have also begun utilizing advanced technologies to make their service more competitive.

The competition between fintechs and banks has become more cutthroat.

E-hailing apps have also jumped into the online payment market. Grab, for instance, has teamed up with Moca, while Fastgo has chosen Vimo.

However, analysts commented that the growth rates and the maturity of fintech firms are still below expectations. This is attributed to legal regulations, competitiveness, and security requirements.

The lack of people’s habit of using non-cash payment is also a problem.

Nguyen Ba Diep, deputy chair of MoMo e-wallet, commented that 2018 was a ‘year of breakthroughs’ of payment fintechs in Vietnam. More and more people in large cities have become familiar with e-payment as they have recognized the benefits. 

In early 2019, the government released Resolution 02 with targets related to e-payment that need to be implemented within the year. The resolution is expected to give a push to non-cash payment development.

However, development is still hindered by some ‘abnormal regulations’. One of these, according to experts, is the regulation that one must have bank accounts to be able to use e-wallets.

Fintech uses high technology to provide convenient services to users, brings services to low income earners and thus accelerates financial inclusion.

In Vietnam, as e-wallet users are required to have bank accounts, fintechs cannot play a major role. As a result, e-wallet, the tool designed for low-income earners in rural areas, is now used to serve high-income earners in cities, where there are tens of services for them to choose.