Jamie Leach, Raidiam’s Open Data Strategist, reflects on the recent UK Fintech Trade Mission to Vietnam and looks at the country’s tech unicorn Zalopay.
Whilst on a recent trade mission to Vietnam, I came face to face with a unicorn, an actual unicorn in its natural habitat. It was the last thing I had expected to see, but there it was, thriving, growing, and so logical in its formation that I had to put pen to paper and write this blog.
UK Fintech Trade Mission to Vietnam
On 4-9 March, Chief Technology Officer and Co-Founder, Ralph Bragg, and I were delighted to represent Raidiam in the inaugural UK Fintech Trade Mission to Vietnam. The trade mission was part of the UK Department for Business and Trade’s UK-Southeast Asia Tech Week which brought together regulators, policy makers, government officials, academics, investors, and companies to celebrate, showcase and discuss the UK-Southeast Asia technology partnership.
We were fortunate to visit the headquarters of three of the top Vietnamese banks and global tech giants’ campuses of FPT and VNG (the creators of Zalopay).
We spent a day with Vietnam Software & IT services (VINASA), a national trade association which focuses on the development of the country’s software industry, before receiving briefings at the UK consulate with Tim Evans, HSBC CEO, and the digital team from the Bank for Investment and Development of Vietnam (BIDV). We also participated in several economic briefings with state officials and had networking opportunities with the British Ambassador to Vietnam, His Excellency Iain Frew, and His Majesty’s Consular General, Emily Hamblin.
The trade mission gave us some exclusive insights into the country’s rapidly expanding tech landscape, and with the State Bank of Vietnam prioritising Open Banking, we believe it will significantly contribute to their national goals of financial inclusion and economic development.
The Vietnamese unicorn Zalopay
So back to the topic of the unicorn – Zalopay by VNG. This unicorn has several markings. It is a fintech, a B2C, a digital wallet, and a super app.
It could never exist in a place such as Australia or the United Kingdom for several reasons. Zalopay has been born of necessity in an economic climate of significant growth, a nation’s digital transformation, regulatory reform, and access to products and services previously unavailable to the masses.
It hasn’t been all plain sailing for this fintech. After solving the initial needs and use cases, it has struggled to maintain growth rates, facing stiff headwinds from the incumbents and a changing appetite from regulators.
Combining interest-bearing accounts, access to consumer credit, payments, insurance, Buy Now, Pay Later (BNPL), bill management, investing in both the stock and gold markets, and with several upcoming features that are not publicly available yet, it is unsurprising that the State Bank has struggled to classify and regulate its operations.
Cash is still king for a significant number of SMEs across Vietnam. The country does not have the same penetration of merchant terminals and point-of-sale (POS) as Australia and the UK. Approximately 63% of the Vietnamese population are unbanked, and only 4% possess a credit card. Just as cash-alternative M-PESA filled a critical gap in financial inclusion in Kenya, Zalopay is facilitating access to financial services for a growing generation of Vietnamese.
But what good is having somewhere to store your wealth if you can’t use it?
Enter QR code payments, integration, and partnerships. One of the most impressive elements of Zalopay is its integration with platforms and partners. They have integrated it with Grab if you’d like to access a ride-share or food delivery service. If you want to shop online, Zalopay is embedded in Shopify. When it is time to pay your utility accounts, they have partnered with national energy and telecommunication companies to not only allow the consumer to pay using Zalopay but also message users in their digital wallet to say their bill is due! And it is commonplace to walk around Hanoi and Ho Chi Minh City and see Zalopay QR codes in shops and markets.
As a former Technical Chartist on the US stock markets, I could geek out over their cost-averaging investment protocols on both the stock market and gold exchanges, which allow citizens to invest with a much smaller amount of money than would normally be possible, but I think I’ll spare you the brilliance in its simplicity and save that for another blog.
How Vietnam compares to Australia and the UK
So, why do I believe that a Zalopay equivalent could never rise and exist in a country such as Australia and the UK in 2024? Our perfect storms never materialised.
Digital accounts and internet banking started in Australia and the UK in the mid-90s. As of 2023, Australia has less than 1% of its citizens unbanked, and the UK has approximately 4%. Our financial service offerings are still disproportionately biased towards the largest banks. We can withdraw cash and pay using cards across 2.3 million POS terminals in the UK and just over 1 million in Australia. And despite the growing trends to shop online or ‘tap and go’ (supercharged by COVID), the strength of our card schemes means that partnerships between banks and global giants such as Visa and Mastercard make it all too easy to stick to the status quo and not seek out alternate finance products.
So, can the unicorn that is Zalopay only exist in Vietnam? I hope not. I hope to see a herd of these unicorns grazing happily across the globe. The central tenets of all financial service offerings should be the ability to solve financial inclusion, access to credit, access to digital services, education of consumers and businesses, wealth creation, security, privacy, and convenience, all in a single platform or super app. And that’s where we get really excited because the potential of our Trust Platform – Raidiam Connect – is that it can facilitate exactly this type of use case.
So, if you see me turning over rocks and gazing from the tops of hills as I traverse the globe, know that I am looking for signs of the next unicorn fintech super app being born. I know that Zalopay won’t be the last one I stumble upon. And to the team at Zalopay, VNG, keep solving the real-world problems you are solving with a purist technology focus!
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Jamie Leach is Open Data Strategist at Raidiam. She is a frequent speaker/author on the transformative potential of data and passionate about sharing global best practices.
