In Asia Pacific, US$15 billion worth of capital was poured into the sector in January 2016 – February 2017. And according to Forbes, Vietnam now has great opportunities to catch up with the trend.

According to Solidiance, Vietnam’s fintech market in 2017 was valued at US$4.4 billion and the figure is expected to increase to US$7.8 billion by 2020.

Solidiance’s survey mentioned many factors that facilitate fintech market development, including a high proportion of internet users, high number of smartphone users in large cities, the popularity of e-wallets, increase in people’s income, and rapid development of e-commerce.

The organization says that the government of Vietnam has offered strong legal support to develop the fintech market. 

If Vietnam fulfills its plan to have 70% of population aged over 15 having bank accounts by 2020, this would help accelerate the development of the fintech market.

However, there are still many things that need to be done to develop the market. 

According to Michael Sieburg from Solidiance, to speed up the launch of new services and products, it is necessary to give legal guidance so that developers can predict market performance and minimize legal risks.

He said that it takes a long time to obtain licenses, which hinders reform.

Solidiance’s research shows that payment solutions account for 89% of Vietnam’s fintech market.

It is expected that only by 2025 would financial products for individuals grow by 31.2% and products for businesses by 35.9%.

The increases would contribute to the implementation of the government’s plan to reduce the rate of cash payments in Vietnam. 

In 2017, the government of Vietnam announced a plan to cut the number of cash-payment transactions to under 10% by 2020.

Previously, according to a report of the World Bank, only 31% of adults in Vietnam had bank accounts, a low proportion because of high transaction fee and complicated procedures. At that moment, clients found it difficult to access services and their confidence in finance services was low.

However, the situation is different now. In 2017, 84% of mobile phone users had smartphones.

Meanwhile, the payment apps can help attract users who cannot access traditional banking services.

Digital payment methods will not only help change the face of the retail market, but also benefit in payments for public services or e-government which may face problems during implementation in rural areas.