Highlights – 2nd Week of February, 2020

Vietnam to remove 49% foreign ownership cap for payment firms

The State Bank of Vietnam (SBV) will not enlist the foreign ownership cap of 49 per cent in the final proposal to be submitted to the Prime Minister in June 2020 [1]. The proposal suggests that banks will be allowed to assign an intermediary firm to conduct partially payment services such as cash in/ cash out an bank account, and payments for goods and services. Within this year, the Government assigned SBV to complete the sandbox in Fintech.

Fintech is a hot industry currently and in the near future. This upcoming to-be regulation would encourage the development of the industry.

Fintech is disrupting Vietnam’s financial services ecosystem. According to Solidiance Research & Analysis,  the fintech market reached US$4.4 billion in 2017 and is estimated to grow to US$7.8 billion in 2020 [2]. However, a recent report published by Allied Market Research, the Vietnam mobile payment market alone was valued at $16,054 million in 2016, and is projected to reach at $70,937 million by 2025, growing at a CAGR of 18.2% from 2018 to 2025 [3].  

According to the State Bank of Vietnam, online and mobile payments have kept booming, with year-on-year growth in the first quarter of 2019 reaching 70% and 97.7%, respectively. As of 31 March 2019, the number of financial transactions conducted on mobile phones almost doubled from 2018. In particular, in the first quarter of 2019, payments via the Internet jumped nearly 70% in volume and 13.4% in value over the same period last year while the growth rates of the mobile channel were 97.7% and 232.3%, respectively [4].  

According to Statista.com, the total transaction value in the digital payments, the largest segment in FinTech, amounts to US$10 billion in 2020. Total transaction value is expected to show an annual growth rate (CAGR 2020-2023) of 10.9% resulting in the total amount of US$13.7 billion by 2023 [5]. Demand for FinTech solutions in Vietnam is underpinned by the rapid adoption of technology, high-levels of mobile usage and rising rates of internet penetration, an increasingly urban, literate and young population, a high rate of underbanked population, as well as a segment of consumers and small- and medium-sized enterprises (SMEs) underserved by traditional banking solutions.


[1] https://e.vnexpress.net/news/business/industries/vietnam-mulls-49-percent-cap-on-foreign-ownership-at-e-payment-firms-4008432.html

[2] https://www.solidiance.com/insights/others/white-papers/unlocking-vietnams-fintech-growth-potential

[3] https://www.alliedmarketresearch.com/press-release/vietnam-mobile-payment-market.html

[4] https://english.thesaigontimes.vn/68485/vietnam%E2%80%99s-non-cash-payment-market-booms-in-q1.html

[5] https://www.statista.com/outlook/295/127/fintech/vietnam

Vietnam’s e-commerce firms Tiki, Sendo said to have held merger talks

Tiki and Sendo are reportedly holding exploratory talks to merge with each other, according to Deal Street Asia. None of them have commented on this issue yet [1].

Lazada, Shopee, Tiki and Sendo are the “big four” in Vietnam’s e-commerce industry currently. Sendo raised a US $61 million Series C round back in November [2] and Tiki has raised a total of US $62.5 million to date [3]. Tiki was said that they were seeking to raise US $100 million in 2019 [4]. 

Although there is still no announcement yet about the merge,  this rumour shows that absolutely it is possible that the two will partner to break the dominance of Shopee and Lazada because Lazada and Shopee with strong support from their parent firms Alibaba and Sea respectively are seizing the upper hand in the local market.

Data from some market research firms shows that the top four e-commerce platforms suffered losses of US $221 million in 2018, a tripled number against 2016. The accumulated losses exceeded US $541.3 million. As of the end of 2018, Tiki recorded US $60.87 million in accumulated deficit and Sendo reported US $56.5 million in losses [5]. Most recently, Lotte, Adayroi and Leflair have shutdowned. The E-commerce industry in Vietnam shows a large potential for growth but also is a fierce market due to its  low consumer confidence, logistics issues, as well as obstacles in physical, digital, and legal infrastructure.


[1] https://www.dealstreetasia.com/stories/tiki-sendo-merger-173908/

[2] https://vnexpress.net/kinh-doanh/sendo-duoc-dau-tu-61-trieu-usd-4015275.html

[3] https://www.crunchbase.com/organization/tiki-vn#section-funding-rounds

[4] https://www.retailnews.asia/vietnamese-e-commerce-platform-tiki-set-to-raise-us100-million/

[5] https://www.vir.com.vn/e-commerce-exorbitant-losses-for-a-single-per-cent-69285.html

Recommended Posts