Six macro trends shaping the future of payments in Vietnam

Even before COVID-19, there have been evidence of a steady shift to digital payments for goods and services. Accelerated by the pandemic, payments are becoming increasingly cashless. On a regional scale, Southeast Asia (SEA) is well positioned to fuel the shift to cashless payments and even greater innovations in the digital services ecosystem. With a consumer base of 623 million people by 2030, SEA is projected to be the fourth largest economy globally. 

As one of the rising economies of SEA, Vietnam holds great potential for e-payment to flourish. The total transaction value of this segment is projected to reach USD15 billion in 2021 along with an expected annual growth rate of 15.7% by 2025. With only 30% of Vietnamese adults using digital banking services, there is room for growth. Increasing the utilization of these services, including digital payments, will help Vietnam realize this potential much quicker.  For digital payment services to make an impact, industry players need to first understand the global megatrends reshaping the future of payments, before beginning to future-proof their businesses. 

Vietnam presents 6 macro trends shaping the future of payments

1. Inclusion and trust In Vietnam, financial inclusion will continue to be driven by mobile devices and access to affordable, convenient payment mechanisms. Many Vietnamese banks and payment service providers have expanded their digital portfolio and capabilities via partnership and collaboration to ensure reach at a low cost.

 2. Digital currencies Sentiments are shifting towards digital currencies as many expect Central Bank Digital Currencies (CBDC) to lower transaction fees and facilitate cross-border payments. In Southeast Asia, the race to conduct CBDC use case testing and the development of necessary regulations will intensify. 

3. Digital Wallets Fierce competition will likely push mega consolidation of digital wallet providers into a few leading regional and local super-apps that will dominate the market. There will also be a rise in partnerships between super-apps and other service providers such as e-commerce, retail, and financial services. 

4. Payment rails QR code solutions and “Buy now, Pay later” (BNPL) are expected to become popular as consumers in emerging markets are leapfrogging the ‘card age’ and migrating directly to mobile wallets and account-based payments. 

5. Cross-border payment As Southeast Asia strives for greater progress in economic integration, expect to see more coherent policies and regulations related to cross-border payments. Non-bank solutions based on cryptocurrency and digital wallets will also emerge. 

6. Financial crime Security, compliance, and data-privacy risks and related issues were the top concerns for banks, fintechs, and asset managers in implementing a fully integrated technology strategy. Therefore, a unified approach against financial crime is crucial. 

Source PwC