The trend of buy now, pay later solutions is projected to gain traction in Vietnam with many players unveiling new services to tap into this fast-growing segment.
|The trend of Bay Now Pay Later services start to increase in Vietnam
Bankograph, a provider of digital payment solutions, has recently unveiled its Buy Now Pay Later (BNPL) solution designed to provide banks in Vietnam with a comprehensive set of new features. The BNPL solution offers ease of use and fast implementation for banks that wish to attract new merchants to bank and empower existing ones to spend more.
According to Alexander Gold, CEO of Bankograph, the BNPL is becoming increasingly popular as e-commerce boomed in Vietnam during the crisis. Vietnamese merchants are eagerly adopting BNPL options. Therefore, Bankograph's latest BNPL solution aims to serve all segments from consumers and merchants.
"This payment method will allow more financial freedom and increased purchasing power for consumers. Meanwhile, merchants using a BNPL solution have increased conversion rates, greater average order totals and more repeat purchases and bring more customers to banks," he added.
He is also upbeat about the outlook of the Vietnamese market in the coming time. The BNPL payment method seems new to Vietnamese consumers but it is expected to grow stronger in the future with many companies ramping up operation in the market.
A recent report by Research and Markets reveals that the BNPL payment industry in Vietnam has recorded strong growth over the last four quarters of 2020, supported by increased e-commerce penetration along with the impact of the economic slowdown due to disruptions caused by the COVID-19 pandemic.
According to the survey, BNPL payment in the country is expected to grow by 137.3 per cent on an annual basis to reach $491.3 million in 2021. The medium- to long-term growth prospects of the BNPL industry in Vietnam remain strong. BNPL payment adoption is expected to grow steadily over the forecast period, recording a compound annual growth rate (CAGR) of 36.5 per cent during 2021-2028.
In March, Vietnamese BNPL startup Fundiin has wrapped up an undiclosed investment in its latest funding round led by 1982 Ventures and Zone Startups Ventures.The startup aims to use the fresh capital to expand its BNPL services targeting Gen Z and millennial shoppers in Vietnam.
Founded in 2019 by Nguyen Anh Cuong (CEO) and Vo Hoang Nam (CTO), Fundiin provides solutions to retailers so that their customers can buy now, pay later in 3 interest-free instalments without involving credit cards. According to the founders, the BNPL trend has taken off in developed markets like the US and Australia and is doing the same in Vietnam. In Australia, the BNPL payment method accounts for 25 per cent of online fashion purchases.
Likewise, Indonesian travel tech unicorn Traveloka announced plans to introduce BNPL services in Thailand and Vietnam to its 40 million active monthly users. The startup has also been in talks with several partners in a bid to enter the market.
Indian merchant payment startup Pine Labs also plans to expand its Pay Later proposition in Southeast Asia as well. Last year, Pine Labs announced that it would launch an integrated pay later instalment solution in partnership with Mastercard to markets like Vietnam, Thailand, the Philippines, Singapore, and Indonesia.
Globally, the BNPL market was valued at $7.3 billion in 2019 and is expected to reach $33.6 billion in 2027, growing at a CAGR of 21.2 per cent, according to Coherent Market Insights. Meanwhile, Vietnam is a potential market for BNPL service providers thank to the fast-growing digital economy, a rising affluent class and low credit card usage.