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Today, as society develops, payment technology becomes faster and more convenient, a series of new inventions related to online payment have been born and are very useful for users' needs in using products faster, safer and more cost-effective than performing many complicated steps and stages in the transaction process.

In particular, the process of opening an international credit card is very important because it not only helps young people pay bills domestically but also outside of Vietnam.

In the past, opening a credit card was very difficult and required many cumbersome procedures to complete.

However, nowadays with just a few mouse clicks or straight operations on the phone, customers can immediately own a credit card.

In this article, let's join FinFan to learn about the development of the above trend along with its impact on the embedded finance industry.

Embedded payment and its development in the Vietnamese market

Definition of embedded payment

In part 4 of the series on embedded finance, FinFan presented types of embedded finance including embedded payment and we also provided some examples of embedded payments being applied in the Vietnamese market.

So, what is embedded payment?

As an example in the article about types of embedded finance, embedded payment is simply understood as a feature that can support buyers of goods or services to pay directly on the sales website or sales app without the need to use an intermediary payment site, and even if you leave the sales page, the payment information is still saved on the site's system.

Online payment in Vietnam before the appearance of embedded payments (2010 – till now)

OnePay, Ngan Luong, and some online payment gateways support online payments.

Before the advent of numerous innovative payment methods facilitated by smartphone technology, many businesses preferred utilizing payment gateway websites for transactions related to their products on their business websites.

The model of sales pages at that time would still be a sales page with a product display and payment button. However, when clicking this button, the user will be taken to an intermediary website of the payment gateway (usually OnePay, VTCPay, or Ngan Luong) to be able to fill in payment information such as card number, cardholder name, and complete the payment process for that transaction.

This form will then create inconvenience and insecurity for users, as they must fill in their information for too many parties, thereby significantly reducing the need for online shopping.

The most typical payment model that developed strongly in Vietnam at that time and still exists today is payment for items or online game scratch cards, phone scratch cards, living expenses payments, etc.

Embedded payment was formed based on the development of online marketplaces plus smartphone technology.

Stage 1: Physical bank cards are still the most optimal online payment method (2013-2016).

In the beginning, when e-commerce sites and apps were just starting to form and develop in Vietnam, they developed a direct payment feature on their own app or page.

From here, when customers create shopping accounts on these e-commerce sites, they can save their own payment information on these sites/apps and make payments for subsequent orders.

At this stage, because the development of technology in general and fintech in particular is still not high, people still mainly use cash as a COD payment method and very few people have credit cards or debit cards to pay online. Therefore, marketplaces’ apps/pages often only integrate mainly payment methods such as debit or credit cards, or cash payment upon receipt of goods.

Stage 2: The boom period of e-commerce platforms in Vietnam and e-wallets began to form (2016-2019)

Around 2016-2017 when the 4.0 technology trend developed in Vietnam, people began to know and get acquainted with e-commerce platforms.

Realizing their convenience, people started using these marketplaces more to buy and sell products. Since then, e-commerce exchanges have begun to develop new and more convenient payment methods to retain their customers by creating a corresponding e-wallet to support users in paying directly on the exchange without having to enter too much personal card information.

The money in this wallet is also stored and refunded in different forms such as exchanged for reward points or vouchers for future purchases,... The most prominent of the above methods is Sen Pay wallet of Sendo or Shopee Pay of the e-commerce exchange Shopee.

At that time, Vietnamese users began to know more about the concept of e-wallets and was also the time when the super application MoMo started its first promotional campaigns to attract users after receiving a huge investment from the fund Standard Chartered Investment.

Stage 3: The period of extremely prosperous e-wallet development and the birth and development of digital banks and NeoBanks (2019 – till now)

Starting from 2019 when MoMo and other e-wallets gradually formed their position in the subconscious of Vietnamese consumers, big e-commerce exchanges for instance Lazada, Tiki, and Sendo gradually connected and integrated the API of e-wallets such as VNPay's QR Code , MoMo, ZaloPay, etc. into their payment system.

Furthermore, this is also an opportunity for exchanges and wallets to take advantage of each other's development to expand market share by continuously launching promotional programs together, the most typical being the cooperated promotion program between Tiki and MoMo “Special Offers for New Tiki”.

Also, during this period, the emergence of the banking digital transformation movement developed strongly from there, and many new payment models and methods were opened in Vietnam.

Read more:

. The reason why many traditional banks in Vietnam have established the digital banks

. Top 3 digital banks in Vietnam

. List of transforming digital banks which have the most users in Vietnam

Among those payment models are virtual credit or debit card payment models.

Virtual credit or debit card, from trending online payment to affecting the embedded payment industry in Vietnam.

From trending online payment

Reporting numbers show the growth of virtual credit card and debit card services among young people.

As this article's introduction states, nowadays, Vietnamese youth love to use virtual credit cards created with just a few taps on a smart phone and do not need to go through many elaborate procedures to open a card.

Here are some numbers that Visa collected in the Vietnam fintech market:

• Cake empowers clients to manage their daily expenses through free-of-charge digital banking while offering them extensive personalization and attracting more than 2 million users.

• More than 8 in 10 consumers now use cards and more than four in 10 foresee going fully cashless when paying for taxis and ridesharing (50%), retail shopping (44%) and food & dining (43%).

• Virtual banking awareness in Vietnam is high (77%) with a majority (88%) showing interest in using digital banking services.

Why does Vietnam like to use virtual credit cards?

Here are some reasons why Vietnamese people like to use virtual credit cards:

• The card opening process is quick and hassle-free.

In an effort to enhance their competitive edge, numerous banks have taken the initiative to create their own digital banking systems.

Concurrently, the government has also made significant strides in digitizing various personal identification documents such as employment identification, driver's licenses, vehicle registration papers, property ownership certificates, and more are now conveniently consolidated within a single software system.

Taking advantage of that, banks have launched virtual credit card products that can be opened in less than 5 minutes with an advanced eKYC system on a phone.

• Competitive card opening and maintenance costs.

Because it is a virtual card, having to pay the costs to preserve and issue a physical credit card will no longer be a problem for the user (if the customer wants, he or she can request the issuer to issue a physical card at any time). At that time, the cost of opening and issuing cards will be significantly reduced.

• There are many incentives sent to customers by card issuers.

Nowadays, customers who own virtual credit cards also receive many accompanying incentives such as refund policies, rewards, shopping points, etc., this helps create convenience and Motivation motivates shoppers to actively spend more money to receive the above incentives.

• Can be linked with many other utilities on the phone.

Most of these virtual credit cards are issued based on the brand combination between businesses, they can be:

a. Electronic wallet – Card issuer - Bank

b. Marketplace - Card issuer - Bank

c. OTAs – Card issuer – Bank

…

Note: The card issuer is usually several companies specializing in this business (maybe both virtual and physical cards or only one of these) such as Visa, Mastercard, JCB, FinFan, etc.

Each different form of issuance will bring different incentives, depending on the card holder's needs.

The most typical example is the case of issuing a virtual credit card with a 3-party combination between delivery and order technology vehicle application named Be, with Cake digital bank of VP Bank and Visa card issuer with incentives directly on this application for customers who often use technology vehicle booking or delivery food services on the Be application.

To affecting the embedded payment industry in Vietnam.

For B2C virtual card issuers and technology partners

The birth of virtual credit cards has given rise to services that combine unique platforms and applications to meet the needs of users more closely.

At the same time, with artificial intelligence technology increasingly developing, virtual credit cards must also increasingly closely follow the technology and produce more intimate and practical services.

On the other hand, technology companies also rely largely on constantly updated information from the use of these virtual credit cards to be able to send customers better and more personalized offers than the general strategy to cover the market, that is really expensive in the beginning.

For B2B virtual card issuers and partners

The growth of the virtual card industry can not only assist technology companies in reaching more potential customers, and end customers with more offers tailored to their needs, but it also supports traditional companies in planning how to use their budget for different business needs.

The most typical example of virtual credit card applications for businesses is supporting business employees on long business trips.

At that time, employees will not need to spend too much time with cumbersome paperwork before leaving, all expenses will be saved on the system and linked directly to the financial management application of the business so that financial managers can capture and allocate appropriate budget to the card.

From here, financial managers will be able to monitor more closely and avoid loss of corporate budget in employee work matters.

Some other forms of applying virtual business cards specifically for businesses doing e-commerce or online travel agencies have also been presented by FinFan in its previous articles.

Read more:

. Virtual cards for e-commerce

. Virtual cards for traveling

FinFan, a business that issues virtual credit cards for businesses

With the advantage of more than 10 years of presence in the fintech market, FinFan, a company that started by providing remittance transfer support services from international to Vietnam.

Being one of the first companies to be approved by the Vietnam State Bank No.973 License of Foreign Currencies Acceptance and Payment, we have constantly explored, created, and researched cross-border payment support products for businesses related to business issues in Vietnam.

Benefits of opening a virtual credit card account with FinFan

When opening a virtual credit card account with FinFan, your business will receive the following benefits:

• Get a multi-currency account.

During 10 years of development, FinFan has been building a network of partners across continents around the globe, which supports FinFan in providing multi-currency accounts for its business customers.

This helps business customers when opening a virtual credit card at FinFan to receive the most preferential exchange rates and service fees from our partners.

Read more:

. 4 Benefits of a Multi-Currency Account for Your Business and How to Choose the Right Provider

• Transactions are processed in real-time.

With technological advantages, FinFan can confidently support all business transactions to be processed immediately through API connection with the payment systems of partners around the world and these ones of the banks and domestic electronic wallets.

• Multiple payment methods.

With constant efforts, FinFan has been one of the fintech companies in Vietnam, building and developing many products related to the most modern payment technologies in the country today such as e-wallet aggregator, bank transfer in real-time, IBAN provider, etc.

We are also researching and developing products related to payment with digital assets through the application of blockchain technology according to the needs of the majority of users in Vietnam (developed in compliance with the latest policy updates of the State Bank).

**Read more: **

. Can pay-to-use blockchains develop in Vietnam?

. What is blockchain? – How can the started like science fiction thing change all payment systems?

. Remitting Funds to Vietnam with Cryptocurrencies

. Surprise about cryptocurrency adoption and transactions of Vietnamese people

. Vietnam leads globally in cryptocurrency adoption

About FinFan

FinFan is a cross-border embedded financial services company, focused on mass disbursement, collection, card processing, IBAN, digital APM solutions, able to provide valuable input and integration above and for the same purpose.

FinFan has integrated with most famous MTO, PSP, switch and core fintech platforms in the world such as Money Gram, Thunes, Qiwi, Remitly, World Remit, Bancore, PaySend, Terrapay, Ria Money Transfer (Euronet), Dlocal , Ripple, TripleA, FoMo Pay, Wings or Zalo.

For more information please contact us via:

🌐https://finfan.io

📞(+84) 2866 85 3317

✉ support@finfan.vn

LinkedIn: FinFan