Top 5 Payment Methods in Vietnam

In an article about e-wallets in the Vietnamese market, FinFan mentioned that e-wallets are one of the most popular online payment methods in this market of 100 million people.

Today, let's join FinFan to learn more about the top 5 payment methods in Vietnam and have a piece of knowledge about the development of the fintech industry in this country, and the opportunities for startups related to this field when they want to develop in Vietnam.

Top 5 payment methods in Vietnam

Online payment methods

5. Online payment gateway

Since the 2000s, when the internet exploded and online games became a popular trend in the Vietnamese market at that time, online payment portals were born with the initial purpose of supporting gamers to top up their game accounts faster than buying scratch cards directly at the grocery store.

Later, payment gateways became more and more popular and expanded into many different fields such as being able to pay bills for electricity, water, internet, tuition, etc.

Some payment gateways also support customers in receiving money from abroad such as remittances, paying for goods transferred to the Vietnamese market as well as other fees for businesses such as:

• Salary and employee benefits

• Advertising money on social media platforms

• Money paid for international services such as hosting, servers, newspapers, etc.

FinFan is one of the payment gateways that can accomplish the above international transactions as we are one of the first fintech companies to have a license from the State Bank of Vietnam approved for collecting and paying on behalf of sending international money to Vietnam.

4. Mobile e-wallet

By the years 2010 - 2020, smartphones began to develop widely nationwide with the number of people using these devices increasing steadily every year.

The world of technology also developed accordingly, and the explosion of phone apps also began to take hold. At this time, mobile e-wallet was born as a trend with users nationwide (starting as a campaign of MoMo e-wallet).

Users are starting to get more familiar with the concept of QR code payments, using the MoMo super app to pay for services that they could previously only operate on computers.

Both online and offline payment methods

3. Bank transfer

This is a form that is quite familiar to the majority of Vietnamese people since banking and services related to them became popular in this country.

Previously, banking-related issues such as money transfers and deposits had to go through bank counters at localities.

However, as digital technology is increasingly developing, all banking transactions today can be easily performed through mouse clicks on a computer or a few operations on a smartphone.

Even with the support of the domestic NAPAS interbank system, the recipient can immediately receive the money transferred by the sender without having to wait until the next day (when the sender and recipient use 2 different banks).

2. Using card for payments

Use physical cards at purchase locations.

Just like bank transfers, debit and credit cards are also two forms of payment that are gradually becoming popular among Vietnamese people (especially in big cities like Hanoi, Ho Chi Minh City, etc.).

However, unlike debit cards, credit cards are often used for expensive services and can show the class of the person using them.

Understanding the above problem, luxury brands such as airline tickets, restaurants, or high-end fashion often offer customers extremely preferential cashback programs for customers using credit cards.

Use virtual cards.

Virtual cards were only introduced to Vietnam in recent years (from 2016 to the present) when the first digital bank in Vietnam, Timo, was established and put into operation.

Up to now, virtual cards have always been a form that has been warmly welcomed by young Vietnamese people in Generation Z because of their convenience and avoiding the risk of losing their cards.

Today, virtual cards not only play a role in supporting final customers in making payments, but they can also support businesses in making payments as well as receiving payments from other international businesses. This type of virtual card is called a virtual card for business, and it can support many different types of businesses from e-commerce to OTA.

Offline payment methods

1. Cash

As a developing country, the percentage of Vietnamese people still using cash in payments is still quite high although there has been significant growth in the number of people paying cashless.

By the end of 2022, over 77.41% of adults in Vietnam will have a bank payment account. In the first 7 months of 2023 compared to the same period in 2022, non-cash payments increased by 51.14% in quantity (Statistics of the State Bank of Vietnam).

The opportunities for fintech startups

The market potential is still huge.

Although the proportion of people using cash in payment has decreased a lot, this number is still very significant and there are still many different areas for fintech startups to exploit.

One of the most typical examples of a market that still has opportunities is the potential coming from international transactions to Vietnam or vice versa.

As we can most easily imagine, investors from countries around the world are increasingly interested in investing in the Vietnamese market, this is reflected in Vietnam's increasing year-by-year FDI capital each year coming to. However, being able to transfer a large amount of money to Vietnam is not an easy task. If it goes through the banking route, it will still require a lot of time and complicated procedures.

If there is some support from a fintech company, the above problem will become easier (possibly through a virtual card with an appropriate budget).

A typical example showing that the market still very potential is that the amount of remittances flowing to Ho Chi Minh City is increasing every year and is even 3 times larger than FDI capital flowing into the country.

This also has a significant impact on fintech businesses that are providing solutions to send remittances to the Vietnamese market, especially through new payment channels such as e-wallet and online banking such as: Ria Money Transfer, Paysend, Remitly, SentBe, etc.

Government support policies have also been greatly supporting fintech businesses related to payment methods.

Nowadays, the Vietnamese government is also very interested in the issue of cashless payment and has updated policies on currency laws to support new payment methods.

• Speaking at the Workshop, Deputy Governor of the State Bank (SBV) Pham Tien Dung said that developing non-cash payments, comprehensive financial universalization, and promoting the electronic payment market to meet the demand of the increasing demand of people and businesses is an important task of the banking industry approved by the Prime Minister in the Project to develop non-cash payments in Vietnam for the period 2021 - 2025. In recent times, the State Bank of Vietnam has proactively researched and promulgated many appropriate regulations to promote non-cash payments such as the Decree on non-cash payments, the Banking Industry Digital Transformation Plan, and the State Bank of Vietnam.

Implement technical standards for QR codes, and chip cards, and enhance standardization of connectivity in the banking industry, between the banking industry and other fields... At the same time, banks are encouraged to research and invest heavily in technology infrastructure, and technical solutions, connect with the national public service portal and other areas of the economy, and establish an ecosystem. to have safe products, improve customer experience, and bring great benefits to customers.*

*Source: thitruongtaichinhtiente.vn

With the above efforts from fintech companies and the government, it is hoped that the future of cashless payments will expand even more strongly in the Vietnamese market.

This article was curated and authored by FinFan's market research and development team, alongside our marketing department.

About FinFan

FinFan is a cross-border embedded financial services company that focuses on mass disbursement, fund collection, card processing, IBAN, and digital APMs solutions, which can provide valuable input and integration on and for the same.

FinFan is already integrated with almost the world's well-known MTOs, PSPs, switch, and core fintech platforms such as Money Gram, Thunes, Qiwi, Remitly, World Remit, Bancore, PaySend, Terrapay, Ria Money Transfer (Euronet), Dlocal, Ripple, TripleA, FoMo Pay, Wings, etc.

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