Vietnam

Fintech Brief
in 2023
UNLOCKING THE FINTECH The middle class, tech savvy population,
OPPORTUNITY IN VIETNAM and the dynamic e-commerce ecosystems
are fueling the burgeoning Fintech sector in
The technology-enabled innovation in financial Vietnam, accompanying mature geographies
services known as Fintech is presenting in the Asia Pacific (APAC) such as China,
significant opportunities in Vietnam for Australia or Singapore. According to World
international investors who are able to Financial Innovation Series, Vietnam’s Fintech
navigate complex regulatory challenges. is witnessing the highest growth rate in
ASEAN after Singapore and is predicted to
Overall, Vietnam remains one of the most reach a staggering 18 billion USD mark by
attractive markets in the region for investors 2024.
interested in the fintech sector, and the
potential for value creation is significant. To The ongoing Fintech innovation makes a
surf on the Fintech wave, entrants should be significant impact on the financial services
aware of the complex regulatory framework, industry and promotes agile and sustainable
take advantage of the digital workforce as well economic development. Recently, the
as understand the potential challenges ahead government approved Vietnam’s National
in order to build successful and sustainable Digital Transformation Program to 2025, which
products for consumers in Vietnam. represents a strong signal paving the way for
Fintech investors in the country.
Vietnam stands out in Asia-Pacific
In addition, Fintech companies are gradually

“
becoming essential and are set to replace
70% of Vietnam’s some significant industry participants,
especially from the traditional banking system.
population is Reports of an increase in the size and number

”
unbanked in 2022 of users of Fintech companies are solidifying
(World Bank)
the market’s potential. With only 47 Fintech
companies operating in 2017, the number of
Fintech companies expanded to 260 in 2022,
according to the State Bank of Vietnam.

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in 2023

A Glance at Vietnam Fintech

The two fundamental drivers for Vietnam’s

fintech potential are ubiquitous connectivity
through mobile, internet penetration and the
rise of E-commerce during the pandemic.
Together, these enable Fintech to flourish in the
100 million population, digital savvy market of
Vietnam. In 2022, Vietnam ranked 4th in digital
transaction value after Indonesia, Thailand,
and the Philippines.

The finance sector in Vietnam is transforming

rapidly as traditional banks and Fintech
companies seek to capture the massive digital
consumer base. This explains why the banking
industry was the first to issue a circular on
eKYC on electronic authentication, which is
the key to digital transformation and digital
banking, noted the State Bank of Vietnam
2023.
In addition, the non-cash transaction value of
Vietnam reached 20.54 billion USD in 2022.
However, this boom is still mainly concentrated
in urban areas. Meanwhile, people from
rural and remote areas prefer cash to digital
payments with more than 90% of cash
transactions here.

Vietnam’s fintech sector is expanding rapidly,

particularly in investment and new businesses,
which increased by more than 180% from
2018 to 2022 based on Statista. The fintech
ecosystem in Vietnam is formed of more
than 263 companies/start-ups from various

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fields such as digital payments, alternative connect between the payment acceptance
finance, personal finance, insurance technology units (the Sellers) and banks (where the
(insurtech) and B2C financial services Purchasers have owned their payment
marketplace. account), to assist customers in making
payments in e-commerce transactions,
In response to the rise of Fintech in Vietnam, electronic bill payments and other electronic
both policy makers and entrants should payments. In Vietnam, some of the more
heighten collaboration. It calls for new popular electronic payment gateway service
approaches to regulation and supervision from providers include: Vnpay, Payoo…
the authorities. Moreover, Fintech players
should understand in depth the regulatory Electronic wallet service (e-Wallet service)
framework in order to build inclusive products
for the Vietnamese market. Pursuant to Decree 101/2012/ND-CP of the
Government, an E-wallet service is regulated
where “a provider of intermediary payment
REGULATORY FRAMEWORK FOR services provides a client with a nominal
FINTECH IN VIETNAM electronic account on an information carrier
(such as electronic chip, mobile phone sim,
In Vietnam, Fintech companies received $410 computer, etc.) that enables the client to
million, or 36% of the total global capital store a sum of money in the form of a deposit
invested into Southeast Asia’s Fintech equivalent to the sum of money transferred
economies in 2022, only behind Singapore. from the customer’s payment account at a
Below is an analysis of selected prominent bank to a secured payment account of the
Fintech activities in Vietnam from a licensing, provider of digital wallet service with the ratio
commercial and legal perspective, covering of 1:1.”
business conditions as well as licensing
procedures: E-wallets in Vietnam are growing widely and
• Payment Intermediary Services, including: are used to pay for goods and services at
- Electronic Payment Gateway Services supermarkets, convenience stores, e-commerce
- E-Wallet Services websites (such as Shopee, Lazada, Tiki), or
• Peer-to-Peer Lending (P2P Lending) other applications and software (such as Grab,
Spotify, Delivery Now). At the same time,
Electronic Payment Gateway Services e-wallets are supported by incentivised users
due to frequent promotions, discounts, and
Electronic Payment Gateway Services are points accumulation.
services providing technical infrastructure to

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Market access limitation under WTO their approved business lines. One of the most
commitment and Business Line registration common business lines which are relevant for
companies providing Payment Intermediary
Regarding market access regulations for Services is.
foreign investors entering Vietnam applicable
to the provision of intermediary payment VSIC Code Business line
services, these activities have not been
Other financial service activities
committed by the Vietnamese authorities 6499 not elsewhere classified (except for
under the WTO Commitment. Accordingly, insurance and social insurance)
after receiving an investment project
registration application from foreign investors, However, foreign investors must still seek
the licensing authority needs to consult the Ministerial approval to be eligible for the
relevant Ministries in regard to permitting provision of this specialised service in Vietnam,
investors to undertake activities in-country. as it is not specified in the WTO Commitment,
That said, there are currently no regulations thus the application process may take several
or conditions regarding foreign investors’ months or more before any approval is
ownership limitations when establishing granted.
entities in Vietnam operating with intermediary
payment services. Local companies owned by Vietnamese
citizens, even though they are not required to
In practice, we have seen several foreign- seek market access approval as their foreign
invested companies in Vietnam obtaining invested peers, may encounter challenges
approval from the licensing authorities to regarding the statutory conditions which need
perform intermediary payment services under to be satisfied to be able to legally operate
their business.

Operational conditions and sub-licenses

Vietnamese law allows both bank and non-

bank organisations to provide Intermediary
Payment Services. However, non-bank
institutions (to simplify, ordinary Vietnamese
companies in the majority of cases) can
only be allowed to undertake the payment
intermediary service after attaining a Provision
of Payment Intermediary Services (License)
from the State Bank of Vietnam (SBV).

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The prime condition to attain the License is the

License name License for Provision of Payment
requirement for minimum charter capital of Intermediary Services
at least 50 billion Vietnam Dong. In addition,
Services to be • Electronic Payment Gateway
the company must satisfy the following applied Service
prerequisites: • E-wallet Service etc.
• Have a scheme to provide an intermediary Authority State Bank of Vietnam (SBV)
payment service.
Lodgement The company submit several sets of
• The Legal Representative, General Director documents by post or directly to the
(Director) of the organisation applying for SBV
the license is required to have a university Timeline Approval within 60 days after the
degree or higher or have at least 3 years authority receives the complete and
working experience in one of the fields valid application file
of business administration, economics, Validity The license is valid for 10 years from the
finance, banking and law. date it was issued by the SBV and may
be requested again at least 60 days
• Have material facilities, technical
before the expiry date.
infrastructure, information technology
systems and technology solutions
Peer-to-peer lending
appropriate to the requirements of the
provision of intermediary payment services.
In addition to the foreign investments flow
The backup engineering system has to be
into the Payment Intermediary Services sector,
built independently of the main system to
peer-to-peer lending (P2P Lending) is a widely
ensure the safe and continuous provision
used service enabled by the growing digital
of services (in case the main system is
market transformation where all monetary
compromised) and comply with specific
transactions are supported by technology.
regulations on ensuring the safety and
Until this day, there is no legal definition for
system confidentiality of banking and
“P2P lending” in any relevant Vietnamese legal
financial information.
document, or any specific decree and or circular
which regulates the activities of companies
As of October 2020, there are 41 licensed
(local-invested and foreign-invested) providing
service providers in Vietnam approved by
P2P platforms/apps in Vietnam.
the State Bank of Vietnam, including Napas,
Viettel Pay and FPT.
Market access limitation under WTO
commitment
Below is an illustration of the procedure for
obtaining the Payment Intermediary Services
Pursuant to WTO Commitments between
(License)
Vietnam and other members of WTO,

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Vietnam Fintech Brief
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P2P Lending is not mentioned as part of - Money broking

“Banking Services and Other Financial - Assets Management
Services”. Specifically, Section 7.B of the WTO - Settlement and clearing services for
Commitment listed the following activities to financial assets
be governed by this commitment: • Provision and transfer of financial
• Acceptance of deposits and other repayable information, financial data processing
funds from the public and related software by suppliers of other
• Lending of all types, including consumer financial services
credit, mortgage credit, factoring, and • Advisory, intermediation and other auxiliary
financing of commercial transaction financial services on all activities listed in
• Financial leasing subparagraphs from (a) to (k), including
• All payment and money transmission credit reference and analysis, investment
services, including credit, charge and debit and portfolio research and advice, advice on
cards, traveller’s cheques and banker’s acquisitions and on corporate restructuring
drafts. and strategy
• Guarantees and commitments
• Trading for own account or for an account Therefore, regarding the ability of foreign
of customers, whether on an exchange, in an investors to access the market in this sector, as
over-the-counter market or otherwise, the there are currently no specific instructions or
following: agreements in place to regulate peer to peer
- Money market instruments (including lending, foreign investors entering this sector
cheques, bills and certificates of deposits) in Vietnam are required to seek investment
- Foreign exchange approval from the relevant Ministries and
- Exchange rate and interest rate follow the process to obtain the investment
instruments including products such as license before the P2P Lending entity can be
swaps, forward rate agreements established in Vietnam.

Business line registration

The operational scope of a P2P Lending

business is to create an environment/platform
for individuals with capital (lenders) and those
who need capital (borrowers) to exchange and
provide currency/capital transactions between
each other without going through the banking
system. Therefore, P2P Lending companies in
fact, unlike companies in the financial services
business, provide a digital technology platform
instead of providing money/loans.

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Vietnam Fintech Brief
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According to public records, most of the P2P P2P lending future in Vietnam and the Fintech
Lending companies operating in Vietnam experimental mechanism (Sandbox)
are domestic companies, however, foreign
investors are increasingly participating in the According to Official Letter No. 5228 of the
market in a proactive, participatory manner. State Bank, SBV also stated that P2P Lending
P2P Lending service companies should register activities can contribute to promoting the
appropriate business lines, commensurable popularisation of finance, expand capacity,
with their activities, as follows: and create more channels to access financial
resources, lending methods, especially for
VSIC Code Business line disadvantaged groups in society but with
access to the internet; thereby, P2P lending
Activities auxiliary to financial service
6619 may contribute to repel the “black credit”
activities not elsewhere classified
situation. However, P2P Lending activities
6312 Web Portals present significant risks for consumers (lending
Management consultancy activities risks, information risks, money laundering
7020 Detail: Financial management prevention risks, cybersecurity risks etc.)
consultancy
that can adversely affect the stability of the
markets and social security.
However, there is still no legal and regulatory
basis to conclude that the 3 above-mentioned The State Bank of Vietnam is concerned that
business lines registered by domestic P2P P2P Lending enterprises may be operating
Lending companies are reasonable and “beyond their authority” when undertaking a
sufficient from the point of view of the relevant form of “banking operations” under Article 8
authorities. of the Law on Credit Institutions 2010 and it
encourages banks and credit institutions to be
In Official Letter No. 5228/NHNN/CSTT dated cautious when signing cooperation contracts
8 July 2019 of the State Bank of Vietnam, the with P2P Lending companies. This further
SBV affirmed this activity: “In Vietnam, some shows that P2P Lending activity in Vietnam
companies have registered their business lines is still strictly monitored by the authorities,
as financial advisory, financial brokerage and resulting in a more difficult licensing process
self-introduction as P2P Lending companies for foreign investors seeking to operate in this
providing services to connect investors and industry in Vietnam.
borrowers; however, the current Vietnamese
law does not have regulations on P2P Lending In response to the requests from both
activities yet”. enterprises and relevant authorities to create
a regulation mechanism for P2P Lending
Therefore, it can be understood that, at companies to legally provide services in
present, there is no specific business line for Vietnam with clear guidance, the Government
P2P Lending Companies to register under the
Vietnamese laws.

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 Vietnam Fintech Brief
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announced in 2020 that it is preparing a

draft decree on a controlled experimental
mechanism for financial technology activities
in the banking sector (Fintech Experimental
Mechanism) which is well-known in other
countries as a “sandbox”. Accordingly, the
“ We recommend international
investors active in the fintech
sector to continue to monitor
the developments within the
Government will allow Fintech investors to
regulatory digital transformation
provide Fintech services in specific areas in framework in Vietnam and be
Vietnam within a definite time frame. After aware of the above prerequisites
the testing period, the investor will receive for market entry provisions
approval from the State Bank of Vietnam to
and conditions before setting
provide full services across the entire country of
Vietnam. However, the draft decree has yet to
out a long-term investment
be passed and we expect the government will strategy in the country.

”
release further guidance on these matters in
Phuong Vo
the upcoming years. Manager - Licensing, Market Entry
and Corporate Services

Contact our teams for expert support and further information on the fintech sector in Vietnam and the
opportunities available for investors.

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