Sumitomo Mitsui Banking Corporation (SMBC) has inked a deal to form a capital alliance with Smart Net Trading Service JSC (SmartNet) with the purchase of shares valued at $9.36 million.
Founded in Vietnam in 2015, SmartNet offers payment solutions focusing on micro, small, and medium-sized enterprises. Additionally, SmartNet delivers brokerage services for loan products as well as personal loans and Buy Now Pay Later schemes, collaborating closely with FE Credit.
The deal is part of SMBC's strategy to expand its Asia franchise and strengthen digital banking capabilities in the region. The goal has been outlined in its medium-term management plan, which covers the three-year period beginning in the fiscal year 2020.
As one of the most active buyers in Vietnam's mergers and acquisitions market, SMBC acquired a 49 per cent equity stake in VPBank SMBC Finance Co., Ltd. (FE Credit) in 2021 – a leading consumer finance company in Vietnam. In May 2022, SMBC entered into a business alliance agreement with VPBank, the parent company of FE Credit.
With the proposed deal, SMBC hopes to fast-track its growth strategy in Asia by expanding the FE Credit business and assisting in the expansion of VPBank Group. SMBC Group aims to accomplish these objectives while supporting SmartNet.
It is making efforts to scale up its payment platform by expanding its customer base in Vietnam while aiming to capitalise on the ample opportunities in the cashless payments market.
Indeed, Vietnam has one of the highest rates of smartphone and internet adoption in the world and a rapidly expanding e-commerce sector. As a result, the country has seen accelerated growth on many digital fronts, including online payments. The adoption rate for cashless transactions in Vietnam has increased to 95 per cent since the pandemic, one of the highest rates in Southeast Asia.
Data from the market research company Statista indicated that the total transaction value in Vietnam's digital payments segment is projected to reach $20.5 billion in 2022. The total transaction value is expected to show an annual growth rate (CAGR 2022-2027) of 14.81 per cent, resulting in a projected total figure of almost $41 billion by 2027.
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