Foreign investment plays an important role in payment intermediaries’ functioning since they rely on technology, and limiting foreign ownership would hamper foreign investment in this segment and the fintech sector in general, the State Bank of Vietnam (SBV) said in a statement on Monday.

In some digital payment firms, foreign ownership already exceeds 49 percent, and so a change in regulations could affect their activities, it said.

The SBV had released a draft of its foreign ownership cap proposal in November for consultation, saying it wanted to balance the ease of attracting foreign capital with ensuring an active role for local firms in the fintech sector.

According to the central bank, by the end of the first quarter this year, there were 27 e-wallets in the market though five parent companies owned 90 percent of them. The five, which the SBV did not name, have foreign ownership of 30-90 percent, it said.

Economists have said that the potential for cashless payment in Vietnam is huge due to a growing middle class and rapidly improving telecom infrastructure. The government wants to make 90 percent of all transactions cashless by the end of this year.

But the reliance on cash remains overwhelming, with 80 percent of Vietnamese preferring to use cash for daily transactions, according to the Ministry of Industry and Trade.