Vietnam's Embedded Finance Sector Poised for Significant Growth, Driving Innovation and Inclusion

Hanoi, Vietnam – Vietnam's embedded finance market is set for substantial expansion, with projections indicating a market value of $1.88 billion by 2025 and a surge to $2.87 billion by 2030. This robust growth, driven by a Compound Annual Growth Rate (CAGR) of 21.6% from 2021-2025 and an anticipated 11.2% from 2026-2030, positions Vietnam as a dynamic hub for financial innovation in Southeast Asia. These figures, released in a comprehensive report by Research and Markets, highlight the increasing integration of financial services into everyday digital experiences across key sectors like payments, lending, insurance, banking, and investments.

The "Vietnam Embedded Finance Market Size & Forecast" report, part of Research and Markets' extensive coverage of global and regional embedded finance, offers deep insights through over 100 Key Performance Indicators (KPIs). It analyzes transaction volumes, revenues, and financial metrics, segmenting the market by business models (platform, enabler, regulatory), distribution channels, and end-use markets such as e-commerce and healthcare.

A Regional Powerhouse in the Making

Vietnam's embedded finance trajectory mirrors and contributes to the broader rapid expansion seen across the Asia-Pacific (APAC) region, which is identified as the fastest-growing market globally for embedded finance. This regional boom is largely fueled by high smartphone penetration, a digitally native population, and supportive government policies. While Vietnam's specific embedded finance CAGR is somewhat lower than the overall APAC average reported by some sources, its broader fintech market is also experiencing strong growth, with projections reaching USD 62.7 billion by 2033, demonstrating the country’s significant digital momentum.

“Vietnam is uniquely positioned to benefit from the embedded finance revolution,” explains a source familiar with the country’s fintech landscape. “The demographics are ideal – a young, tech-savvy population eager to adopt new technologies – and the government is increasingly supportive of fintech innovation.”

Key Players Driving the Transformation

The Vietnamese embedded finance landscape is shaped by both established tech giants and innovative startups. Dominant fintech players like MoMo, ZaloPay, and VNPAY are central to the digital payments ecosystem, handling a vast array of transactions. These platforms, along with emerging embedded finance providers, are actively integrating financial solutions into non-financial services.

Notable examples include:

• Timo, a digital banking platform, offering Banking-as-a-Service (BaaS) solutions for businesses to embed banking services.
• E-commerce leaders such as Shopee and Grab are embedding financial products like Buy Now, Pay Later (BNPL) options, microloans, and insurance directly into their platforms. Shopee’s recent partnership with YouTube to enable in-app shopping further illustrates this trend.
• Tech companies like Haravan are collaborating with banks to provide embedded lending solutions to their customers.
• Digital banks like Cake, integrated within services such as the Be ride-hailing app, are expanding access to financial services for previously underserved populations.

Strategic partnerships between fintech firms and traditional financial institutions are a hallmark of the market, enhancing accessibility and user experience.

“Collaboration is key,” notes a fintech executive. “Traditional banks have the regulatory expertise and established infrastructure, while fintechs bring the agility and innovative technologies. This synergy is crucial for driving growth and expanding financial inclusion.”

Evolving Regulatory Landscape

The State Bank of Vietnam (SBV) is at the forefront of shaping the regulatory environment for fintech and embedded finance. The SBV is actively developing and implementing a Fintech Regulatory Sandbox, a controlled environment for testing new financial technologies and business models. This initiative, now enshrined in the Law on Credit Institutions No. 32/2024/QH15, allows for limited-scale experimentation over a maximum of two years within Vietnam.

The SBV has identified promoting non-cash payments, digital banking, and green banking as key priorities. Recent regulatory moves include a mandate in July 2024 for facial recognition for mobile banking and digital wallet payments exceeding $390, aimed at bolstering security. Despite these advancements, the rapid pace of innovation presents ongoing challenges, particularly concerning anti-money laundering, cybersecurity, data protection, and consumer safeguarding.

“The SBV is walking a tightrope,” says a regulatory expert. “They need to foster innovation while also ensuring financial stability and protecting consumers. The regulatory sandbox is a positive step, but more clarity and flexibility are needed to accommodate the rapidly evolving fintech landscape.”

High Adoption Rates Among Consumers and Businesses

Vietnamese consumers and businesses are rapidly embracing digital financial solutions. A young, tech-savvy population and high smartphone penetration (84% of adults) underpin this trend.

• Digital Payments: Cashless transactions in Vietnam were valued at 23 times the GDP in 2023, with significant year-on-year growth in both volume and value in the first four months of 2024.
• E-wallet Popularity: By the end of 2023, Vietnam boasted 32.77 million active e-wallets, with major players like MoMo and ZaloPay demonstrating high user penetration.
• QR Code Revolution: QR code payments have seen explosive growth, with transactions skyrocketing by over 170% in volume and value in early 2024. VietQR alone has achieved 85% merchant reach.
• Financial Inclusion: Fintechs are instrumental in expanding financial inclusion, providing accessible services to underserved populations. The National Financial Inclusion Strategy aims for 80% of adults to hold bank accounts by 2025, a goal supported by initiatives like online account opening via eKYC, which has led to nearly 35 million operational accounts.
• BNPL Growth: The Buy Now, Pay Later (BNPL) sector is also expanding rapidly, with payments projected to reach $2.2 billion in 2023 as consumers increasingly adopt these flexible payment solutions.

While challenges such as an entrenched cash culture in rural areas and interoperability issues persist, the overwhelming trend indicates a strong and sustained shift towards digital and embedded financial services in Vietnam. This rapid evolution underscores the significant opportunities for investors and businesses to capitalize on a market that is not only growing in value but also profoundly reshaping how financial services are delivered and consumed.