By 2025, the digital commerce segment in Vietnam is likely to have 70.9 million users. Financial technology (fintech) is sweeping through the entire Southeast Asia (SEA) region, with online businesses improving their software, adding mobile capabilities and creating new payment options for their customers. The Buy Now Pay Later (BNPL) model is the latest monetary solution available to buyers.

As the name suggests, BNPL involves allowing consumers to pay for items in instalments. The provider establishes conditions such as when the customer pays, the amount due, fees for late payments or service use and the length of time provided to clear the bill. The shopper has to cover the upfront product cost and the repayments.

The service enables buyers to get what they want without paying the total amount in one go. This means they can better manage their budget and spread out expenses, thereby maintaining control of their cash flow. It is also very affordable as companies opt against charging interest for accessing the option. The BNPL model also aids in fueling growth in the retail sector by providing consumers with an accessible and convenient financial solution.

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According to the Vietnam Market and Investment Opportunities Report 2021, BNPL payments will be worth approximately $491.3 million USD this year, representing an annual growth of 137.3%. Throughout the forecast period of 2021-2028, the industry will grow by 36.5% yearly.

Last year, Vietnam's most popular online shopping categories were food at 52%, with clothing, shoes, and beauty products at 43%. Home appliances accounted for 33%, whereas tech devices were at 23%. In the travel sector, ticketing represented 26%, with hotel bookings at 21%. These elevated amounts indicate a very robust eCommerce industry in the country.

Let us take a look at some of the BNPL startups Vietnam has to offer.

Fundiin

Providing a Point-Of-Sale (POS) BNPL option, Fundiin allows buyers three payment periods with no hidden fees and no interest accumulated. There are no penalty charges for those who pay on time. After providing phone details and the user's image, the customer can complete the transaction.

Fundiin has partnerships with SABLANCA, Sapo, DHC, vuanem, DOLL EYES, bellelab and Frank. In September, it brought its total funding to $1.8 million USD with investors including JAFCO Asia, 1982 Ventures, Trihill Capital, Genesia Ventures, Zone Startups Vietnam, Xffirmers and Pham Le Nhat Quang.

Kredivo

Indonesia's Kredivo is a BNPL digital credit company, which provides various payment services and a personal loan in just a few minutes. It has a 0% interest rate for customers who pay within three months and a 2.6% rate for an instalment period starting from 6 to 12 months.  

A few months ago, the company announced plans to enter the Vietnamese market in a joint venture with Phoenix Holding. It also established a partnership with VPC Impact Acquisition Holdings II to become a publicly traded company in the US.

Kredivo's current total funding amount of $310 million USD comes from investors such as Victory Park Capital, Partners for Growth, Reinventure and Kauffman Fellows Fund.

Bankograph

Fintech company Bankograph provides end-to-end flexible payment technology. Although based in Singapore, it has operations in Vietnam. In 2020, it signed a memorandum of understanding (MOU) with National Citizen Bank (NCB) to deliver digital financial solutions and bring foreign investment.

It also has a partnership with global payment security firm SISA to combine financial technology and cybersecurity.

Traveloka

Indonesia-based online travel booking company Traveloka is also part of the BNPL market in Vietnam. It introduced its PayLater option and cards to allow customers to book trips and complete payments conveniently.

It has raised $1.2 billion USD in six rounds of funding. Its investors include Sequoia Capital, Global Founders Capital, East Ventures, Expedia, GIC, Hillhouse Capital Group, EV Growth and Qatar Investment Authority.

Pine Labs

Merchant commerce platform Pine Labs, based in India, provides POS terminals, analytics, loyalty programs and business solutions software. It offers working capital loans to keep companies running. Last year, it announced a partnership with Mastercard to bring BNPL solutions to Southeast Asian markets.

Thus far, it has raised $838.2 million USD in 10 funding rounds. Investors include BlackRock, IIFL Asset Management, Kotak Mahindra Bank, Invesco, Fidelity Management and Research Company, Tree Line Capital Partners and Baron Capital.

With the COVID-19 pandemic changing consumer behaviour, Vietnam's Buy Now Pay Later model is a flexible and convenient method for completing online and offline transactions. Customers have several payment options available with little to no interest and no hidden fees. For the companies, it reduces cart abandonment, adds value to buyers and boosts sales.

The BNPL startups Vietnam has will continue growing in the short and long term. As per the report, the Gross Merchandise Value will rise from last year's $207 million USD to $4334.5 million USD by 2028. The country's government and industries need to invest massively in fintech, provide technology training, and improve financial regulations to succeed in the new digital economy.