According to PwC, Vietnam sat in second place with the most ASEAN’s fintech funding in 2019, following Singapore. The impressive increase of fintech funding was owing to two of the largest fintech investments in that year: VNPay’s over US$1 billion and MoMo’s US$233.8 million deals in 4 rounds.
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Many foreign entrepreneurs and companies are taking an interest in investing heavily in Vietnam’s fintech market over recent years, especially in digital payments. The fintech investment spike is mainly motivated by the high internet and mobile penetration rates, unbanked population, and the potentially large market.
To establish a fintech business in Vietnam, you need to adopt the fintech rules and regulations set out by the Vietnamese government. Cekindo has compiled the most important regulations that you need to know before starting a fintech business in Vietnam.
Regulators of Fintech Industry in Vietnam
FTC is a government-controlled body that is serving as the regulator in Vietnam’s fintech sector. This centralised body plays an important role in creating a direct conversation between the fintech companies and the government – helping the former solving legal issues, and creating a regulatory sandbox for testing fintech services.
Regulatory Framework
Due to the increasing demand for acquiring an IPS license by organisations in Vietnam, the government of Vietnam has approved cashless payments as legal payment instruments. Under this regulation, foreign investors are permitted to own a maximum of 50% of Vietnamese ISP’s shares.
Related: How to Set Up a Business in Vietnam
P2P lending platforms are not uncommon in Vietnam but the country’s P2P lending continues to be unregulated. However, Vietnam’s central bank has started to set up P2P lending’s regulatory framework.
Specific Rules for Fintech in Vietnam
The Vietnamese government has recently revised its legislation. The amendment states that high-tech transactions are now not required to have in-person meetings when building relationships with customers.
Opening an account in Vietnam also doesn’t need a face-to-face meeting and Vietnam’s central bank is currently adopting Open API in the country’s banking sector.
Regulatory Sandbox
A newly issued decree specifies that Vietnam’s banking sector is now having a regulatory sandbox. The regulatory sandbox makes it possible for lending institutions, innovative firms, and fintech services providers to test their products or services in a regulated and rigorous legal environment.
The participation in the sandbox is only open to fintech companies that obtain a Vietnam’s incorporation certificate. Services allowed to be in the regulatory sandbox are payment systems, P2P lending, Open API, support for KYC, and other technological modern services.
Establishing a fintech business in Vietnam is different from setting up a banking institution per Vietnamese Company Law. The key difference is that fintech companies are authorized to remodel and modernize some banking services with fintech solutions.
Big Players in the Fintech Industry in Vietnam
At the moment, there are four outstanding startups leading the fintech landscape in Vietnam:
- VayMuon: the largest P2P lending platform in Vietnam
- MoMo: the newest e-wallet platform in Vietnam
- Finhay: a micro-investment platform
- Utop: an electronic gift exchange platform and exchange application
How Cekindo can Assist
Fintech in Vietnam is the main component in the evolution of the country’s financial industry.
As the leading business consulting firm in Vietnam, Cekindo thinks more immensely about the impact that fintech in Vietnam will have on diverse businesses and broader aspects in the region. Therefore, we strive to provide you with the latest updates and recommendations.
Our professional consultant team is well placed to help you drive your fintech business growth. We also serve as a platform for many other types of businesses to access the vast opportunities that fintech in Vietnam is ready to offer.
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