How do Vietnamese consumers pay? Exploring popular payment methods

Vietnam is the fifth largest economy in Southeast Asia, growing at a rapid and strong pace, with a GDP of about 400 billion USD, providing a potential market for foreign businesses and investors. Understanding how Vietnamese consumers pay is crucial for businesses and financial service providers, especially those in the realm of fintech, remittances, and cross-border payments. In this article, we will explore the most popular payment methods in Vietnam, offering valuable insights for those navigating this dynamic market.

1. Vietnam market growth in 2023

Vietnam's gross domestic product (GDP) growth rate for 2023 is estimated at 5.05 per cent, according to the General Statistics Office (GSO) announcement on December 29. Vietnam's economy has been experiencing robust growth in recent years, fueled by factors such as foreign investment, industrialization, and a burgeoning middle class. With a young and tech-savvy population, Vietnam is poised to become one of the fastest-growing economies in Southeast Asia, attracting businesses and investors from around the world.

E-commerce sales surged in 2023, Vietnam is in the top 10 global countries in e-commerce growth, leading Southeast Asia in expanding online shopping. According to data from Metric.vn, the revenue generated by the B2C e-commerce market in Vietnam increased by an impressive 25%, surpassing the 19.6% growth observed in 2022.

Besides, by 2023 the international money transfer market in Vietnam will grow by 2.9% to reach 13.15 billion USD. According to forecasts of financial experts, the period 2023-2028, the market size is expected to record a CAGR of 2.3%, increasing from USD 12.78 billion to USD 14.72 billion in 2028.

This economic expansion translates to a rise in consumer spending, creating a fertile ground for innovative payment solutions.

2. Vietnam's move away from cash

Traditionally, cash has been the primary mode of payment in Vietnam, especially popular in rural, remote areas and islands, where people have difficulty accessing banks. However, with the rise of digitalization and the proliferation of smartphones, Vietnamese consumers are increasingly embracing digital payment methods. This shift away from cash is driven by factors such as convenience, security, and the growing availability of digital payment infrastructure. 

• Increased smartphone penetration: As of 2022, Vietnam will have more than 73.5% of the adult population owning smartphones. This widespread access to mobile technology paves the way for the adoption of mobile payment solutions.
• E-commerce boom: The rise of online shopping necessitates reliable and user-friendly online payment methods.
• Government initiatives: In 2020, Prime Minister Nguyen Xuan Phuc signed Decision No. 749 approving the "National Digital Transformation Program by 2025, with a vision to 2030", aiming for Vietnam to become a stable and prosperous digital nation by 2030.

According to this program, Vietnam is pioneering the testing of new technologies and models, fundamentally innovating comprehensive management and operation activities of the Government, business production activities, people's ways of living and working, and developing a safe, humane, and widespread digital environment.

3. Popular payment methods in Vietnam

3.1. Cash

Despite the rise of digital payment methods, cash continues to play a significant role in Vietnam's economy, particularly in rural areas and among older demographics. Cash remains a preferred choice for small-value transactions and in markets and street vendors. However, its dominance is steadily declining as digital payment infrastructure expands.

3.2. Bank transfers

Bank transfers remain a popular payment method in Vietnam, particularly for larger transactions such as salary payments, bill payments, and business-to-business transactions. Mobile banking apps are increasingly facilitating online bank transfers, further blurring the lines between traditional banking and digital wallets.

3.3. Debit and Credit cards

While not as prevalent as other methods, debit and credit cards still hold a place in the Vietnamese payment ecosystem. Debit and credit cards are gaining popularity among Vietnamese consumers, especially in urban areas. With the expansion of banking services and the rise of e-commerce platforms, more Vietnamese are opting for card payments for their convenience and security features.

3.4. Digital wallets

Digital wallets, or e-wallets, have emerged as one of the preferred payment methods in Vietnam. These convenient apps allow users to store money, make in-store payments via QR codes, transfer funds peer-to-peer, and settle bills – all from their smartphones.

Below are some popular e-wallets in Vietnam:

• Momo
• ZaloPay
• 9Pay
• ViettelPay
• VnPay

3.5. Buy Now Pay Later (BNPL)

The Buy Now Pay Later (BNPL) model is gaining traction in Vietnam, especially among younger consumers. This payment method allows customers to make purchases and pay for them in installments, offering flexibility and affordability.

9Pay is proud to be the leading reputable and safe online payment solution provider in Vietnam with payment gateway, collection and disbursement products. 9Pay supports a variety of payment methods such as: domestic bank cards, Visa cards, e-wallets, QR Code, Payment link, Apple Pay, BNPL buy now and pay later,... helping foreign businesses easily pay service accounting in Vietnam.

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4. Vietnam moves towards national digital transformation

Vietnam is actively pursuing a national digital transformation agenda, aiming to modernize its economy and accelerate digital adoption across sectors. This initiative emphasizes the development of a robust digital infrastructure, fostering innovation in the fintech sector, and promoting financial inclusion. The government is investing in digital infrastructure, promoting digital literacy, and fostering innovation in digital payments. This government support further strengthens the future of cashless payments in Vietnam.

In conclusion, understanding Vietnamese consumer payment preferences is essential for businesses and remittance service providers operating in Vietnam's dynamic market. With the rise of digitalization and the increasing adoption of digital payment methods, businesses need to adapt to meet the evolving needs of Vietnamese consumers. By offering a diverse range of payment options and leveraging digital payment infrastructure, businesses can capitalize on the opportunities presented by Vietnam's growing economy and emerging digital landscape.