Fintech could hold the key to reducing reliance on cash in Vietnam, according to Visa
Fintech companies could hold the key to driving last mile adoption of digital payments and unlocking Southeast Asia’s vast cash displacement opportunity, according to Visa, the world’s leader in digital payments.
It is estimated that around US$1 trillion of annual personal consumption expenditure across Southeast Asia is still made using cash or cheques1. However, a young population with rising disposable income, a relatively high level of internet penetration, and more than 300 million smartphone users, presents an opportunity to rapidly transition these economies towards digital payments.
Speaking at the Vietnam Fintech Forum 2019, Adeline Kim, Visa’s Head of Products & Solutions in Southeast Asia, said: “Everywhere we look, technology is changing the most minute elements of our day-to-day lives, helping us to get transport more efficiently, have groceries delivered straight to our homes, and connect and speak with loved ones on the other side of the world. With the growth of the fintech industry, we’re seeing an incredible variety of businesses emerging that are working on innovative ways to make a world of commerce more accessible to people everywhere. We see this as being particularly important in Vietnam — given that the percentage of the population that uses formal banking services is relatively low, there is vast potential that can be tapped by fintech companies who are able to address the needs of this diverse group of people.”
Visa is committed to setting global, interoperable standards and connecting buyers with sellers in a growing variety of channels where commerce happens. A cornerstone of Visa’s long-term strategy is to deepen current client relationships and expand into new partnerships. Visa looks for investments that will extend our network capabilities into the global open commerce ecosystem as it changes and grows, and that will provide mutually-beneficial business opportunities to as many participants as possible.
In July of this year Visa invested in GOJEK, Southeast Asia’s leading mobile on-demand service and payments platform, as part of the latter’s ongoing Series F fundraising round. With GO-PAY's (GOJEK’s electronic payments platform) position as Indonesia’s market leader in digital payments and financial inclusion, the funding from Visa will support the acceleration of GOJEK’s payment services across Southeast Asia. The partnership will see GOJEK and Visa collaborating on innovative payment solutions for digital-first consumers and Southeast Asia’s unbanked and underserved population.
Last year also saw Visa launch its inaugural “Visa Everywhere Initiative” in Vietnam — a global innovation program that tasks up-and-coming businesses with solving some of the most challenging issues in payments and commerce. Visa gave out a total of 700 million VND to selected startups in this program in order to help them achieve their objectives in the fintech industry.
Visa Country Manager for Vietnam and Laos, Dang Tuyet Dung, said: “Helping the population of Vietnam to migrate to digital payments is a goal that we share with the government and the State Bank of Vietnam. In addition to our long-standing relationship with financial institutions, we’re committed to working with the fintech community through initiatives such as our Visa Everywhere Initiative to realise both our goals of financial inclusion and digital transformation, as well as the economic goals in the cashless agenda of the government of Vietnam.”
1 Visa analysis of data from Oxford Economics, The NilsonReport, Euromonitor, Haver Analytics, The Bank of Thailand as at 2017.
About Visa Inc.
Visa Inc. (NYSE: V) is the world’s leader in digital payments. Our mission is to connect the world through the most innovative, reliable and secure payment network - enabling individuals, businesses and economies to thrive. Our advanced global processing network, VisaNet, provides secure and reliable payments around the world, and is capable of handling more than 65,000 transaction messages a second. The company’s relentless focus on innovation is a catalyst for the rapid growth of connected commerce on any device, and a driving force behind the dream of a cashless future for everyone, everywhere. As the world moves from analog to digital, Visa is applying our brand, products, people, network and scale to reshape the future of commerce. For more information, visit About Visa, visa.com/blog and @VisaNews.