Predicting the Impact of the 47th President Donald Trump's Policies on Cross-Border Payments to Vietnam

With the event of Donald Trump’s return to the White House, businesses and financial institutions involved in cross-border payments are considering what his policies could mean for the future of the industry.

A Trump presidency could impact the global economy in significant ways, with the Asia-Pacific region, and specifically Vietnam, being no exception.

In this article, we’ll explore how a renewed Trump administration might influence cross-border payments to Vietnam, considering past trends, potential new policies, and the implications for businesses and consumers.

1. Trade Policies and Bilateral Relations

Historically, Donald Trump’s approach to trade has been marked by a push for “America First” policies, which seek to reduce the U.S. trade deficit by imposing tariffs and renegotiating trade agreements.

During his previous term, these policies led to heightened trade tensions with countries like China. Although Vietnam was not the primary focus of Trump’s tariffs, any policies targeting Asia could indirectly affect Vietnam due to its close trade ties with China and other regional neighbors.

A Trump administration may also revisit tariffs, sanctions, or restrictions that could impact companies involved in cross-border payments. U.S. financial firms operating in or with Vietnam could see new regulatory hurdles, making it harder for individuals and businesses to remit money or make payments between the two countries.

Moreover, due to the impact of Trump’s increased tariff policies, China may channel cheap goods into Vietnam, which could put Vietnamese small and medium-sized manufacturing businesses in a difficult position.

The recent arrival of the Chinese e-commerce platform Temu in Vietnam is a prime example of this issue.

On the other side, Trump’s heavy tariffs on Chinese goods create a favorable environment for Vietnamese companies to gain an advantage in exporting high-quality Vietnamese products to the U.S.

At the same time, it serves as a morale boost for leading Vietnamese businesses with branches operating directly in the U.S., such as VinFast.

Vietnamese electric vehicles, for example, will have greater growth opportunities since they are manufactured within the U.S. itself.

2. Potential Currency Manipulation Claims and Their Impact on Payment Fees

In 2020, the Trump administration labeled Vietnam a currency manipulator, citing the devaluation of the Vietnamese đồng as a cause of the U.S. trade deficit.

While this designation was removed under the Biden administration, Trump could reinstate it, which would have repercussions for the cross-border payment ecosystem.

Currency manipulation claims often lead to increased scrutiny, sanctions, and even tariffs, which could raise transaction fees for remittances and business payments.

If transaction costs rise due to fees and regulatory hurdles, the cross-border payment volume may decrease, impacting companies reliant on remittance flows from the U.S. to Vietnam.

Higher costs could also encourage alternative digital solutions, such as cryptocurrency and blockchain-based transfers, if traditional avenues become too expensive.

However, the legal issues surrounding cryptocurrency transactions in the Vietnamese market continue to be a major challenge for Vietnamese businesses up to this point.

3. Immigration Policy Changes and Their Influence on Remittances

One of Trump’s major policy focuses was immigration reform. Under his administration, stricter immigration policies led to a reduction in visa approvals and heightened restrictions on undocumented immigrants.

This policy direction could reduce the number of Vietnamese migrants or temporary workers in the U.S., thereby affecting the volume of remittances to Vietnam.

Since the Vietnamese diaspora in the U.S. is a significant contributor to remittances sent home, fewer Vietnamese individuals working or studying in the U.S. could reduce the funds flowing back to Vietnam.

Financial institutions and payment providers in the cross-border payment space may see a decline in transaction volumes, potentially impacting their revenue and market strategies.

4. Impact on Fintech Innovation and Cryptocurrency Regulation

During his first term, Trump was skeptical of cryptocurrency, which he referred to as a potentially harmful technology.

Given that crypto off-ramps and other digital finance solutions have recently become popular channels for cross-border payments, a hardline stance on crypto could hinder the adoption of these alternatives for transferring money to Vietnam.

Stricter regulations on cryptocurrency in the U.S. would directly impact American companies providing crypto services, making it more challenging for Vietnamese users to benefit from the advantages of crypto, such as lower fees and faster transaction times.

Additionally, if the administration restricts or monitors certain fintech innovations, companies dealing with cross-border payments may need to adjust their technology infrastructure, leading to increased compliance costs.

However, this rigid stance of the 47th President of the United States has shifted. In a recent campaign effort, Trump attended the Bitcoin 2024 event and promised to designate Bitcoin as a strategic reserve asset for the United States.

This is a new bright spot in the issue of cryptocurrency nationalization and also a glimmer of hope for fintech companies providing off-ramp services in Vietnam.

5. Opportunities for Non-U.S. Financial Partners

If a Trump administration implements stricter financial regulations on U.S. companies engaging in cross-border payments, Vietnamese companies may look to diversify their partnerships.

Non-U.S. financial institutions and fintech firms could seize this opportunity by filling the void left by any American companies facing new restrictions.

Companies from regions with lighter regulatory burdens, like the EU or Australia, might step in to cater to cross-border payment needs, potentially altering the competitive landscape in Vietnam.

6. The Role of Emerging Digital Payment Platforms in Vietnam

Given the potential for increased costs and barriers with U.S.-based platforms, digital wallets and local fintech solutions like MoMo, ZaloPay, and VNPay could become more critical in Vietnam.

These platforms offer domestic alternatives that are well-integrated into the Vietnamese economy, providing lower-cost solutions that align with local regulations.

Partnerships with global cross-border payment services like Remitly, Paysend, and MoneyGram through FinFan may also grow, ensuring Vietnamese residents still have access to affordable options if U.S. partnerships become more complex.

7. What This Means for the Vietnamese Economy and Financial Ecosystem

Ultimately, the influence of a Trump presidency on cross-border payments to Vietnam would be a mix of challenges and opportunities.

Increased barriers could stifle certain financial flows, potentially leading to a decrease in the volume of remittances and cross-border transactions.

However, it might also drive Vietnamese firms to innovate and find alternative partners or technology solutions to facilitate cross-border payments.

Final Thoughts

While Donald Trump’s potential policies on trade, currency, immigration, and fintech regulation could pose obstacles, they may also catalyze Vietnam's push for self-reliant digital financial solutions.

Vietnamese businesses and individuals dependent on U.S.-based cross-border payments may need to adapt, and local fintech firms could emerge as essential players in this new financial landscape.

This period of change may offer Vietnamese companies and payment solution providers the chance to lead with innovative, efficient payment models, fostering an ecosystem that can thrive in a shifting global political environment.

As we wait to see what the next U.S. administration brings, cross-border payment providers in Vietnam should keep a close watch on policy developments and be prepared to pivot, ensuring their resilience in an evolving global financial landscape.

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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