Q & A
Q & A
Online Payments in
Vietnam has a population of roughly 92 million, making it the 3rd largest country in Southeast Asia. In a
by the Boston Consulting Group, Vietnam was found to have the fastest growing middle class in Southeast Asia. By 2020, the country is expected to have 30 million middle class and rich consumers. With 139% mobile penetration and a young demographic, Vietnam is one of the most promising markets for gaming and online shopping in Southeast Asia.
Only 1.9% of adult Vietnamese citizens reported having a credit card
in 2014, up only slightly from 1.2% in 2011. This makes Vietnam the country in Southeast Asia with lowest credit card penetration. 26.5% of the adult population reported having a debit card in 2014. However,
according to BankNet
, only 50% of the debit cards in circulation are being used – and of these, only about 3 million cards were registered for online banking transactions.
While card-based payments are not especially widespread, online banking has grown in popularity: 64% of banked Vietnamese customers in a recent survey indicate that they use online banking in 2012.
Cash Payments at Retail
Neilsen Global Saving and Investment Strategy
reports indicate that 61% of the Vietnamese population use cash as the preferred method of payment. As another indicative measure: up to
of customers on e-commerce website Zalora pay by cash on delivery.
Direct Carrier Billing (i.e. SMS billing, Telco payments)
Direct carrier billing isn't as popular in Vietnam as in other countries for several reasons. First, Telcos continue to charge fees that can be up to 50% of the purchase amount, which dissuades merchants from implementing it. Second, prepaid credit in Vietnam is mostly distributed in the form of vouchers codes (i.e. customers buy a physical voucher, scratch it to reveal a code, and then enter that code in their phone to top-up their prepaid credit balance – with which they can make a DCB purchase) – and physical vouchers are also made available as a payment channel by Telcos, but at a significantly lower cost.
Vietnam is predominantly a prepaid market:
89% of customers
have a prepaid account, and 11% of customers have a postpaid account. As a result, risk of bad debt (i.e. the customer making a purchase, and then not paying their bill) is of less concern than in markets like China where post-paid account ownership is higher.
The biggest mobile operators in Vietnam are Viettel (with 56 million customers), MobiFone (with 27 million customers), and Vinaphone (with 26 million customers). Vietnamobile and Gmobile also operate in Vietnam and have a combined ~15% market share.
Smartphone penetration is
36% of the population
of the respondents in a recent survey had made a purchase using their mobile phones in the last month.
Viettel, MobiFone, and Vinaphone (the three largest telcos in the country) all enable customers to redeem the prepaid mobile credit vouchers that they distribute to purchase digital content from third-party merchants. All three services work basically in the same way: the customer either (1) buys a physical card which contains a code that can be revealed by scratching the back, or (2) goes to a convenience store and asks the cashier to print them a code from the terminal in their store. The customer then enters that code into the merchant's website, the value associated with that card is redeemed, and the purchase is complete.
Unlike Indonesia and the Philippines where prepaid mobile credit is distributed by Telcos electronically and without the use of a voucher code, in Vietnam voucher codes are the primary channel through which Telcos distributes their prepaid credit. As a result, these codes are widely accessible. And because any customer with a mobile phone knows what to do with the voucher code (they purchase and redeem a code any time they top-up their prepaid balance), it's an intuitively understood payment experience.
Merchants that use Codapay can receive payments via the Viettel, MobiFone, Vinaphone, Vcoin, and Gate vouchers.
to learn more.
If you need help navigating Vietnam's landscape of payment channels, or are interested in learning more about how Coda can help you monetize in this market,
get in touch!
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