Remittances to Vietnam Reach over 600 Billion VND just during TET - Opportunities and challenges for Fintech companies

According to recent data from a well-respected online finance and business publication, remittances to Vietnam during the Tet holiday have exceeded 600 billion VND this year, with notable increases seen in Central provinces such as Nghe An and Ha Tinh. This surge in remittances primarily stems from labor exports to countries like Japan, Korea, and Taiwan, significantly improving the livelihoods of rural residents.

One remarkable case is a village in Do Thanh commune, Yen Thanh district, Nghe An, which has undergone a remarkable transformation into what locals now call a "billionaire village." Evidence of this transformation includes expanded roads, increased presence of automobiles, and the emergence of luxurious villas in close proximity.

These remittance inflows undeniably offer myriad opportunities for rural development. However, they also pose challenges for Vietnam's fintech sector in the foreseeable future. Let's explore this topic further with insights from 9Pay in the subsequent discussion.

Remittances to Vietnam: A Catalyst for Rural Prosperity

Remittances to Vietnam serve as a crucial lifeline for rural advancement, comprising up to 50% of district production value, as reported by NguoiQuanSat.Vn. Initially intended to cover essential expenses such as living and educational costs, remittances predominantly from labor exports empower families to address their basic needs more comfortably.

Given the agricultural background of these families, daily expenses and rural education costs tend to be modest, resulting in substantial savings. Consequently, recipients can significantly elevate their quality of life by constructing homes, acquiring vehicles, and even building villas on their land.

Challenges for Vietnam's Fintech Industry

As remittances from labor exports to Vietnam continue to rise, there's a growing concern that some families and youth may view labor export as the primary pathway to improving their economic circumstances. This trend could have profound implications for the country's workforce. Firstly, it may lead to a brain drain as individuals opt for immediate financial gains over pursuing higher education, potentially depriving the nation of skilled professionals. Secondly, there's a risk of resource depletion, particularly in sectors such as those within industrial parks, where fewer individuals may choose to work, thereby affecting domestic production quality. Moreover, the rapid increase in demand could foster the proliferation of illicit labor practices, further complicating the integrity of the labor force.

The Increasing Demand for Money Transfers to Vietnam

The necessity for money transfers to Vietnam is poised to escalate, particularly during festive seasons like Tet, not only in rural areas but also in urban centers. Evidence of this lies in the continuous breaking of records for remittances to Ho Chi Minh City in 2023.

Simultaneously, payment technology in Vietnam is evolving rapidly. Presently, young people in Vietnam can conveniently handle their daily transactions with just a few clicks on their smartphones, or even by scanning QR codes without physical contact. This evolution places unseen pressure on fintech companies to innovate and develop products that cater to these evolving needs.

In response, fintech firms must persistently strive to update technology and enhance transaction systems to minimize errors that could compromise service quality. Additionally, they must seek reputable international partners capable of aiding them in achieving these objectives.

Technology Solutions Offered by 9Pay and Partners

Recognizing these challenges, 9Pay has integrated with major platforms like Wordpress, Woocommerce, Magento, among others, and collaborated with numerous international partners to advance cross-border payment technology.

One of those partners is E9Pay in Korea, 9Pay has combined with this unit specializing in remittance money transfer services to Vietnam in all fields of the latest technology including:

• Direct API connection to e-wallet partners through 9Pay's e-wallet 

• Direct API connection to Vietnamese domestic banking partners

9Pay's integration with NAPAS enables seamless connectivity with over 50 domestic banks. Through our collection and payment service, customers' remittances are swiftly transferred in real-time to the recipient's bank account in Vietnam. This eliminates the need for recipients to endure lengthy waiting periods to receive funds from their loved ones abroad. With 9Pay's efficient system, the transfer process is expedited, ensuring that recipients can access their funds promptly and without delay.

About 9Pay

9Pay is among the select few payment intermediaries licensed by the State Bank of Vietnam to provide intermediary payment services including collections, disbursements, Payment gateways, and e-wallets. With the esteemed PCI-DSS level 1 international security certification, 9Pay collaborates with over 1,000 financial partners domestically and internationally. Processing billions of USD worth of transactions annually with a success rate of up to 99%.