Unlocking Growth of Remittance to Vietnam - 3 Key Opportunities for Remittance Service Providers to Vietnam
As of now, remittance transfers to Vietnam have experienced continuous growth over the past 20 years, achieving a positive outcome in 2023 by reaching the milestone of 14 billion USD.
However, remittance transfers to Vietnam still face many technological and regulatory challenges, which remain a persistent problem in the market, especially given the high rate of cash usage among Vietnamese, particularly in remote and rural areas of the country.
Therefore, in this article, let’s explore with FinFan the 3 key opportunities that remittance service providers can leverage to increase the number of customers transferring money to Vietnam.
The Shift from Traditional Remittance Transfers to Vietnam towards the Use of Technology (especially Mobile Technology).
Digital Remittance to Vietnam Market Growth
In recent years, as the world of smartphones has rapidly developed in Vietnam and payment activities through mobile apps have subsequently exploded, a multitude of technological applications such as e-wallets, mobile payment gateways, and mobile money have emerged, increasingly establishing their position in the payment landscape in Vietnam.
Recent statistics have highlighted this issue, with over 50 million users expected to be using e-wallets by the end of 2024, according to experts.
Moreover, the rise of digital banks in Vietnam is also a positive sign, following the emergence and success of the branchless bank Timo.
This has compelled major commercial banks in Vietnam to swiftly adapt their customer outreach strategies by digitizing banking services and simplifying previously cumbersome transfer procedures.
Opportunities for Remittance Service Providers to Leverage in Vietnam
The market's transition from cash payments to cashless payments has created a significant foundation for change in the operations of businesses involved in remittance solutions to Vietnam.
This necessitates a change in their approach and the development of remittance solutions to Vietnam that fully leverage digital and mobile tools.
Additionally, they need to collaborate with businesses in Vietnam that have extensive payment networks, including banks and widely used e-wallets, to connect APIs and support users in conducting remittance transactions that are “Faster - Safer - More Cost-effective”.
Keeping up with this trend, FinFan has launched an ewallet aggregator product that allows the connection of e-wallets in Vietnam, providing businesses involved in remittance transfers to Vietnam with an additional method for senders to pay remittance directly into the recipient's ewallet account in Vietnam.
Eliminate complicated processes in the remittance transfer to Vietnam.
Thanks to advanced technologies leveraging the development of smartphones, the remittance process to Vietnam, which previously required numerous steps and various documents to be carried when sending money, has now been simplified.
Furthermore, the process of verifying remittance applications also incurs significant costs for senders.
In the report on remittance fees to Vietnam published by FinFan on its LinkedIn channel below, the average fee for sending money can reach 0.37% of the transferred amount.
Additionally, senders are subject to an average currency conversion fee of up to 0.87%, resulting in a total fee for a remittance transaction that can sometimes reach 1.2%. For example, a person sending $1,000 to Vietnam would incur a transaction fee of $12.
However, in practice, FinFan continues to address similar transaction cases daily where the sender uses online money transfer apps.
Even when the sender chooses the cash pickup method, the amount that the sender has to pay for these apps is significantly lower (sometimes even zero for the first transaction, only incurring a minimal exchange rate difference)
On the Vietnam side, the recipient only needs to go to the nearest bank counter of FinFan’s partner banks, give the transaction code to the bank employee, and receive the money.
Not to mention that currently users only need three steps to transfer money internationally directly into e-wallet accounts widely used by many Vietnamese, such as MoMo, ZaloPay, VNPay, Viettel Money, VNPT Money, and more there are currently over 50 million accounts in Vietnam like above details.
Read more:
. Opportunities for companies involved in cross-border payments to expand their market.
This issue will also significantly limit businesses and banking partners in Vietnam, who are the key players in providing remittance services, as they have to incur a lot of printed paper for customers to fill in their names and the transfer code when visiting their branches in Vietnam.
Moreover, these technology-based alternative methods of receiving money will significantly reduce the burden on businesses and banking partners in Vietnam, who are the key players in providing remittance services to Vietnam.
Previously, they had to use a lot of printed paper for customers to fill in their names and receipt codes when visiting their branches in Vietnam.
With FinFan's e-wallet aggregator product, the digital remittance invoice will be sent directly to the recipient's e-wallet address or bank account in Vietnam.
Identifying lower-risk customers and implementing proportionate measures to reduce exclusion
Shifting towards other technological tools also enables unbanked and underbanked individuals to access international funds, instead of having to go through cumbersome procedures as before to open a bank account and receive money.
Recently, the concept of advanced data-driven of technology applications offers simpler ways for users to complete their own KYC steps (except in special cases).
This minimizes the need for KYC personnel at banks while increasing the number of potential remittance recipients and ensuring greater security.
Those classified as low- and medium-risk recipients can quickly pass the KYC check after third-party intermediaries like FinFan certify that they comply with KYC and AML policies in Vietnam.
For businesses, the KYB process through data migration intermediaries like FinFan will save them time compared to having to bring documents to the bank and then complete remittance procedures after the bank has verified those documents.
Conclusion Regarding 3 Key Opportunities for Remittance Service Providers to Vietnam
In conclusion, the remittance market to Vietnam presents significant opportunities for service providers to capitalize on, particularly through the integration of advanced technology.
Firstly, the shift towards mobile technology and digital tools allows for more streamlined, cost-effective transfers, meeting the growing demand for convenience and accessibility among users.
Secondly, collaborating with local businesses and banks to create interconnected payment networks, such as e-wallet aggregators, enables faster, safer, and more cost-efficient transactions.
Finally, leveraging technological advancements in KYC and KYB processes reduces friction in onboarding new users and businesses, ensuring compliance while expanding access to remittance services for unbanked and underbanked populations.
These opportunities provide a foundation for remittance providers to enhance customer satisfaction, improve operational efficiency, and drive growth in this evolving 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.
For more information, please get in touch with us through:
🌐https://finfan.io
📞(+84) 2866 85 3317
✉ support@finfan.vn
LinkedIn: [FinFan](https://www.linkedin.com/company/finfanio" \t "%5Fblank)
Dr. Tuyen Nguyen
Money Beyond Borders
