What's next for Vietnam's Fintech after the regulatory Sandbox?

Vietnam, with its impressive digital economic growth rate, is witnessing the vigorous rise of its Fintech sector. However, legal and regulatory barriers have historically been the largest hurdles. The government's recent directive to implement a Regulatory Sandbox for Fintech, particularly in the payments sector, is hailed as a historic catalyst, opening a golden gate for technology-driven financial companies.

The Sandbox - a catalyst for innovation

The Regulatory Sandbox is more than just a policy; it is a safe, controlled environment that allows Fintech companies to test new products, services, and business models for which regulations are not yet explicitly defined in current law.

The greatest opportunities presented by the Sandbox lie in three key areas:

- Testing advanced payment solutions: This is the core focus area. The Sandbox enables Vietnamese Fintechs to test cross-border payment solutions, next-generation remittance technologies, and even payment services leveraging Blockchain technology. According to a World Bank (WB) report, integrating digital payment systems can reduce transaction costs for small and medium-sized enterprises (SMEs) by 30-50%, a critical advantage for companies operating within global supply chains.

- Applying artificial intelligence (AI) and Machine learning (ML): The Sandbox provides the framework for Fintechs to experiment with AI-driven risk models. Specifically, this involves applying AI in Anti-Money Laundering (AML), Fraud Detection, and credit risk assessment. This is crucial for companies like 9Pay, which, as an international payment intermediary, prioritizes security. Testing ML algorithms under the Sandbox's oversight will help 9Pay and other Fintechs enhance their capability to detect abnormal transactions in real-time.

- Strengthening security technology and Digital identity: With the explosion of digital transactions, sophisticated Digital Know Your Customer (eKYC) and advanced data security technologies are essential. The Sandbox serves as a launchpad to verify the effectiveness and reliability of new security solutions before their widespread adoption.

9Pay’s strategic direction in the sandbox context

As a licensed payment intermediary, 9Pay fully aligns with these new regulatory directions. 9Pay's strategy is not just about utilizing the Sandbox but also preparing its technological infrastructure to be ready for testing.

- Focusing on Cross-border payment specialization: The new legal framework will allow 9Pay to test more flexible collection and payout models for its international PSP/Remittance clients. This further reinforces 9Pay's USPs of speed and competitive cost.

- Upgrading the compliance platform: Under the Sandbox's supervision, 9Pay can validate and demonstrate its adherence to international standards (such as PCI DSS Level 1). This sends a strong message to international partners that 9Pay is not only fast but also highly reliable and fully compliant.

- Applying data analytics technology: 9Pay is concentrating on implementing advanced data analytics tools to optimize automatic reconciliation processes and cash flow forecasting, a key factor in helping international e-commerce businesses operate efficiently in Vietnam.

The Regulatory Sandbox is the right strategic move by the Vietnamese Government to align with global trends. It is not just recognition for innovation but also a tool to balance innovation with risk management.

With impending legal clarity, Vietnamese Fintechs, including 9Pay, will have greater impetus to invest in core technology and expand into the regional market. The opportunity is not limited to testing products but extends to building a robust, secure, and internationally connected digital payment ecosystem, positioning Vietnam as a critical digital financial Hub in Southeast Asia.