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Big players to join Vietnam’s FinTech market
Ngoc Thuy 16:42, 2017/11/14
After Alipay, Samsung Pay, there will be Facebook Apple and Google to join the Vietnam’s financial market. However, the era of cashless payment has not begun, as not only Vietnamese banks and FinTech companies, but also these tech giants are facing numerous challenges.
The decision of the State bank of Vietnam (SBV) to allow the cooperation between Alipay and the National Payment Corporation of Vietnam (NAPAS), thus opening door for Alipay to join Vietnam’s market, is a sign of openness from administrative agencies and banks with FinTech companies. This is also an opportunity for Vietnamese FinTech companies to grow, with an aim to provide customers with financial services without the need of going to banks. 
 
Samsung Pay is being implemented efficiently in Vietnam.
Samsung Pay is being implemented efficiently in Vietnam.
Before Alipay, Samsung Pay has joined the Vietnam’s market, along with the financial transaction channel eMBee in Facebook of the Military Bank (MB). As such, MB expected that the bank will have 500,000 new customers in 2018 through this channel. As of present, many commercial banks in Vietnam have cooperated with FinTech companies to develop services and creative digital products. Currently, SBV also issued licenses for 24 providers offering intermediary payment services. 

According to General Director of McKinsey & Company Vietnam – Marco Breu, the development of Vietnam’s economy & technology has opened new doors of development for FinTech. “In average, more than 50% people interviewed in our survey are open and willing to use digital payment. In the upcoming 10 – 15 years, the model of traditional banks will not much use left, and is replaced with the the cooperation between banks and FinTech”.  With this being said, the cooperation to build an ecosystem is the way to success. 
 
NAPAS - Alipay MoU Signing Ceremony.
NAPAS - Alipay MoU Signing Ceremony.
Never before has the Vietnam’s financial market witnessed the booming of applications for e-payment. However, this wave has not spread to customers, as people are still favor of paying with cash. Despite the easy and convenient to use from Samsung Pay or payment through QR code scanning of Alipay, the majority of customers downloading these applications could not use them anywhere or any place, as in shopping at the traditional markets, or drinking coffees and eating breakfasts on the streets, customers cannot use QR Code or Samsung pay.

E-wallet or QR code is only the tip of the iceberg. The root is how Vietnam can develop a system of merchants using technologies and accepting e-payment instead of cash. Therefore, this process will will take time to change the mindset of users. Besides, e-wallet services must be simple to use, as merchants are often busy with their works and do not have much knowledge on finance & banking. Bearing this in mind, it is necessary to have legal framework in applying digital technologies for banks and FinTech companies.

Currently, Vietnam do not have the necessary legal framework for FinTech to develop and experiment, while the current law and regulations are complex and not suitable with the creative development in digital banking. For example, in Singapore, FinTech companies and start-ups can experiment everything they want on the condition of a clear business plan. Only when they have grown to a certain level, then the government will start to look at these companies. This is what is lacking in Vietnam at the moment, and this is also the reason why Vietnamese FinTech companies cannot commercialize their products. Therefore, the most difficult thing is how FinTech can cooperate with banks to provide their services to customers. In order for Fintech companies to develop, there must be a legal framework for them to experiment new products. 
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