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|Vietnam is touted as one of the most lucrative fintech markets in the region|
Latest figures by the State Bank of Vietnam’s Payment Department show that fintech companies in Vietnam now number around 100, compared to nearly 80 earlier this year.
Market survey firm Solidiance recently released statistics showing that the Vietnamese fintech market’s transaction value currently stands at $4.4 billion, which will climb to $7.8 billion by 2020, nearly doubling in only two years.
This explains why foreign players are seeking ways to inject capital into Vietnamese fintech firms.
South Korean group Keb Hana, apart from negotiating a stake purchase deal with local state-owned commercial lender BIDV, was reported to consider teaming up with a local fintech firm via direct capital injection or through an investment fund.
Similarly, Senjo Group, a major fintech firm based in Singapore with profit averaging at $400 million per year, is targeting payment fintech firms in Vietnam.
Senjo Group’s CEO Gavin Lock assumed that Vietnam will continue to be a tempting market to fintech firms in the coming time and that beside payments, they will possibly engage in lending after setting foot in the country.
The State Bank of Vietnam’s statistics show that around $130 million of foreign capital has poured into Vietnamese fintech firms in the past two years
Before the entry of Keb Hana and Senjo, China’s Alipay, through a Vietnamese intermediary, was reported to engage in negotiations on buying stake of a local fintech firm.
The State Bank of Vietnam’s statistics show that around $130 million of foreign capital has poured into Vietnamese fintech firms in the past two years.
Some eminent cases involve Korea’s UTC Investment spending VND542 billion ($24 million) on buying a 65 per cent stake in VNPT Epay, MOL Accessportal buying 50 per cent of Vietnam’s top online payment system Ngan Luong, NTT Data buying 64 per cent of Payoo, True Money buying 40 per cent of IPay, and a consortium of Credit Saison, Golden Gate Ventures, and GMO Global Payment buying 25 per cent of Bao Kim.
According to Nghiem Thanh Son, deputy head of the Payment Department under the SBV, with 51 million smartphone users (half of the population), 61 million Internet users (66.3 per cent of the population), and widespread 3G and 4G network, Vietnam provides ideal conditions for fintech development.
While foreign players are keen on joining Vietnam’s up-and-coming fintech market, local banks have been shaking hands with fintech firms to ensure their development.
Tran Cong Quynh Lan, VietinBank’s deputy general director, unveiled that despite having an expansive network with more than 1,000 transaction points, the bank has been cooperating with about 10 fintech firms both at home and abroad.
“It proves impossible for banks to go alone. That is why we team up with fintech firms for development at present and in the future. Leveraging this cooperation, we expect to launch new innovative products late this year or early next year,” he said.
Industry experts assumed that in this transitional period when foreign investors are exploring the potential of the Vietnamese fintech market, local banks need to boost cooperation with fintech firms to ramp up their market share.
Across the ASEAN, governments have been making efforts to create an enabling regulatory system to spur the development of banks and local fintech firms.
The SBV’s recent survey shows that 81 per cent of local banks opt for joining hands with fintech firms for development instead of self-studying products.
If these cooperations come to fruition, the sides will create a sustainable ecosystem to avoid hostile acquisitions and protect local production.