Digital payment, or the electronic transfer of funds between parties facilitated through digital channels, has changed the way financial transactions are carried out in today's digital age. This modern form of payment eliminates the need for physical currency or traditional banking instruments, instead relying on electronic systems and technology to ensure safe and efficient transactions. Mobile wallets, online banking transfers, and credit/debit card transactions are just a few of the many digital payment methods available, each with its own set of advantages and benefits.
Vietnam’s Current Digital Landscape
Vietnam's telecom sector is experiencing a significant surge in the adoption of mobile payments and digital wallets, driven by rapid smartphone penetration and a youthful, tech-savvy demographic. This growth is underpinned by increasing consumer confidence in digital payment technologies and a robust push from the government.
Reports from the State Bank of Vietnam highlight a remarkable increase in the volume and value of transactions made via mobile apps and digital wallets, whereby the volume of cashless transactions increased by 50.1% year-on-year.
The popularity of digital wallets is further buoyed by the convenience they offer, along with incentives such as discounts, cashback offers, and loyalty points. According to Vietdata, the number of digital wallet users in the country will grow to 50 million active users in 2024, 100 million users in 2026, and 150 million users in 2030.
Facilitating Convenience and Growth
Telecom is heavily influenced by digital payments because it enables the seamless integration of payment methods into its services, allowing customers to easily pay for telecommunications products and services. This integration improves the customer experience by offering convenient payment options via mobile apps, online portals, and automated systems. Digital payments simplify billing processes, lower transaction costs, and increase revenue collection efficiency for telecom companies. Furthermore, digital payment technologies help to improve financial inclusion by allowing people who do not have access to traditional banking services to pay electronically, increasing the customer base for telecom services.
The Vietnamese market's growth trajectory is inextricably linked to the widespread adoption of smartphones and rising internet penetration, both of which increase the accessibility and convenience of digital payments.
This surge is fueled even more by the burgeoning e-commerce sector, as consumers seek secure and convenient payment options as online retail grows. The allure of shopping from home, combined with the rapid digitization of businesses, drives up demand for digital payment solutions such as digital wallets and credit/debit card transactions. Notably, the COVID-19 pandemic has accelerated the adoption of contactless payment methods, driven by increased hygiene awareness and a preference for touch-free transactions, resulting in significant market growth.
Additionally, government initiatives aimed at increasing financial inclusion and creating transparent financial systems, combined with rapid technological advancements in payment technologies such as blockchain and biometrics, are reshaping the digital payment market by improving security, efficiency, and personalization.
The Vietnamese government is implementing a comprehensive digital transformation agenda, as outlined in the National Digital Transformation Programme. Scheduled for completion by 2025 and oriented towards objectives set for 2030, this agenda aims to modernize and digitize various sectors of the country's economy and society. This initiative aims to improve awareness, enterprise strategies, and incentives for businesses, cooperatives, and business households in order to boost productivity, efficiency, and competitiveness.
As part of this effort, key payment-related goals have been established, such as shifting 50% of banking operations to online platforms, ensuring 50% of the population has digital checking accounts, and facilitating 70% of customer transactions through digital channels. Furthermore, the program aims to digitize 70% of credit institutions' work and service records, indicating a broad shift toward digital-first practices across multiple sectors, ultimately propelling Vietnam into a digitally empowered future.
Vietnam's Digital Payment Market Primed for Growth
According to Statista, Vietnam’s digital payments market is poised for substantial growth, with the total transaction value forecasted to soar to USD 32.18 billion in 2024. This upward trajectory is anticipated to continue, with an annual growth rate (CAGR 2024-2028) of 8.95%, culminating in a projected total transaction value of USD 45.34 billion by 2028.
As digital retail flourishes, Vietnam's leading fintech sector— digital payments— experiences parallel growth. As consumers adopt e-payment methods for their online transactions, competition intensifies. In this dynamic landscape, businesses aiming to excel amidst surging demand for digital payment services must deliver innovative solutions.
