- VietQR revolutionizes digital payments with 100M monthly transactions.
- E-wallets face challenges as banks’ mobile apps gain popularity through VietQR’s convenience.
- Competition intensifies as fintech providers and banks enhance digital capabilities to deliver value.
VietQR’s rapid adoption
Vietnam’s digital payment landscape has undergone a significant transformation, largely driven by the widespread adoption of the VietQR standardized QR code system.
Introduced by the National Payment Corporation of Vietnam (NAPAS) in 2019, VietQR enables seamless payments across various banks’ mobile applications.
The system’s popularity has skyrocketed, reaching 100 million transactions per month in the third quarter of 2023, equivalent to one transaction for every person in the country.
E-wallets face new challenges
The rise of VietQR has raised questions about the future of digital wallets in Vietnam. Some argue that the convenience of instant payments through banks’ mobile apps may diminish the need for e-wallets.
However, others believe that e-wallets and domestic real-time QR payments can coexist, the former building services on top of the QR code network and the latter focusing on enabling fund transfers.
Vietnam’s digital payment market, estimated to be worth US$160 billion in gross transaction value by 2025, has entered a new era of competition.
Competition in the digital arena
Leading fintech service providers, such as MoMo, ShopeePay, and VNPay, have emerged as dominant players in the market. These companies have been aggressively building their respective super apps, partnering with major players like Grab, Gojek, and TikTok Shop.
Vietnamese commercial banks have also made substantial investments to enhance their digital capabilities. The transaction value of real-time payment systems in neighboring countries has surged, and VietQR’s popularity could make the government’s goal of reducing cash payments to 8% by 2025 more feasible.
Regulatory issues, such as the requirement for e-wallets to be linked to bank accounts and user identity verification, pose challenges to e-wallet adoption.
As the competition intensifies, the focus is shifting towards delivering value to merchants and building additional financial services like buy now, pay later, savings, and stock investing.
To read the original article: https://www.techinasia.com/vietnams-qr-code-revolution-puts-pressure-on-digital-wallets
