Online Marketplace Payment Solutions Part 3 - Social Media in Vietnam – The Future of E-commerce

With the rapid growth of social media in Vietnam, platforms like Facebook, Instagram, and TikTok have become major players in the e-commerce landscape.

As social media evolves into a marketplace for businesses and individuals, the demand for reliable payment solutions tailored to this unique environment is increasing.

This blog explores how marketplace payment solutions are shaping the future of social media commerce in Vietnam, addressing key challenges and providing insights into the most effective solutions.

Social media has transformed from a platform for personal connections to a bustling marketplace where businesses sell products directly to consumers.

Vietnam, with its young and tech-savvy population, has embraced social commerce. Platforms like TikTok Shop and Facebook Marketplace have become integral to many sellers’ strategies, especially for small to medium-sized businesses and individual sellers.

According to a 2023 survey, over 50% of Vietnamese consumers make purchases via social media platforms.

This surge in online shopping through social media has led to a growing need for secure, efficient, and flexible payment solutions.

The result is that by the end of the first quarter of 2024, TikTok Shop surpassed Lazada to become the second-largest e-commerce platform in Vietnam in terms of market share.

Additionally, the trend of shopping through short review videos has grown stronger than ever, pushing other e-commerce platforms to adapt and catch up with this trend.

While the growth of social commerce is undeniable, it comes with several challenges, particularly around payment processing.

Here are some of the key issues faced by sellers and buyers on social platforms in Vietnam:

Lack of Integration with Traditional Banking Systems:

Many social media platforms are not fully integrated with traditional Vietnamese banking systems, making payment collection complicated for sellers.

An example is that, despite TikTok Shop's success in the market, users still face issues when paying for items on the platform.

The bank they use may not be directly connected to the platform, forcing them to either switch to a different bank or choose the more complex method of paying through Visa or MasterCard using the 2c2p payment gateway.

Trust Issues:

Buyers are often wary of making payments online, particularly for social media purchases where formal business frameworks may be lacking.

For this reason, even though Facebook Marketplace was established and developed long before TikTok, it still hasn't become a suitable solution for sellers to buy and trade goods.

This is because users receive no legal support when purchasing items on Facebook's marketplace.

Inconsistent Payment Methods:

Each platform offers different payment options, and many businesses struggle to streamline these methods to provide a unified experience for their customers.

The most typical example of this situation is that while Facebook accepts payments through the MoMo e-wallet but does not connect with other e-wallets, TikTok Shop accepts payments via ZaloPay.

Additionally, users can still use MoMo for e-commerce transactions as well as for advertising on this social platform.

To address these challenges, several marketplace payment solutions have emerged in Vietnam.

These solutions offer secure, efficient, and user-friendly options for both buyers and sellers, making social commerce more accessible.

E-wallets (Momo, ZaloPay, ViettelPay)

E-wallets have become one of the most popular payment methods for social commerce in Vietnam. Momo, ZaloPay, and ViettelPay allow users to easily transfer money, pay for products, and even link their accounts to traditional banks.

These e-wallets are particularly attractive due to their simplicity and the growing trust they have garnered among Vietnamese consumers.

Recognizing the potential growth of the e-wallet payment market, since 2021, FinFan has developed and implemented the ewallet aggregator product to connect payments across multiple e-wallets.

This allows customers to use a variety of e-wallets to make payments on social media marketplaces more efficiently.

Advantages: Quick transactions, wide acceptance, and integration with social media platforms.
Challenges: Not all consumers use e-wallets, and small sellers may face fees on certain transactions.

Bank Transfers

Bank transfers remain a reliable and widely used method for payments in social media marketplaces. Many sellers encourage direct bank transfers to minimize transaction fees associated with other payment solutions.

Advantages: No third-party fees, direct payment to the seller.
Challenges: Manual process that can be time-consuming for both buyers and sellers, and it may create trust issues if sellers are not well-established.

Cash on Delivery (COD)

Despite the growth of digital payment methods, Cash on Delivery (COD) remains a popular choice for social commerce transactions in Vietnam. This method offers buyers the confidence to inspect products before paying.

Advantages: Increases trust, especially for new or smaller sellers.
Challenges: COD is more suitable for physical products and can be more expensive for sellers due to logistics fees.

QR Code Payments

QR code payment solutions are growing in popularity in Vietnam’s social commerce landscape. This method allows buyers to scan a seller’s QR code via their banking app or e-wallet, streamlining the payment process.

Advantages: Convenient, contactless, and secure.
Challenges: Not all buyers are familiar with QR code usage, and it requires both parties to have mobile banking apps or e-wallets that support QR codes.

The future of marketplace payment solutions for social media in Vietnam looks promising, as the country continues to embrace e-commerce.

Here are some trends that will likely shape the payment landscape in the coming years:

Integration of AI and Automation:

Payment gateways that incorporate AI will help businesses automate invoicing, payment tracking, and customer support, reducing friction for sellers on social media.

. Ai For Cross-Border Payments – Why Not?

Mobile-first Payments:

With Vietnam’s high smartphone penetration rate, mobile payments will continue to dominate the market, with a focus on e-wallets and mobile banking solutions.

Enhanced Security:

Payment providers will invest in stronger fraud detection and security measures to protect both buyers and sellers in social commerce transactions.

Payment service providers for marketplaces on social media platforms also need to ensure compliance with KYC (Know Your Customer) and AML (Anti-Money Laundering) regulations, as well as obtain PCI-DSS (Payment Card Industry Data Security Standard) certifications for card payments.

Cross-Border Transactions:

As Vietnamese sellers expand their reach to international buyers, payment solutions that offer affordable, fast cross-border transactions will become increasingly important.

With its efforts, FinFan is successfully fulfilling its role as an intermediary connecting remittance service providers to Vietnam with the country's banking and e-wallet systems. Currently, Vietnamese customers in international markets such as the US., the UK, Germany, France, Australia, South Korea, Japan, and Taiwan can send remittances to Vietnam through three methods:

remittance to Vietnam to the recipient's bank account,
remittance to Vietnam directly to the recipient's e-wallet,
or the recipient receiving cash at the transaction counters of banks partnered with FinFan.

We have also supported e-commerce platforms like Facebook and TikTok Shop in processing payments for some international customer orders to Vietnam through our trusted partners.

Marketplace payment solutions are crucial to the continued growth of social commerce in Vietnam.

With the rise of e-wallets, QR code payments, and even emerging technologies like cryptocurrency, sellers have more tools than ever to manage their payments efficiently.

As social media platforms continue to evolve into robust e-commerce hubs, the integration of seamless payment options will be vital in shaping the future of online commerce in Vietnam.

For Vietnamese businesses and sellers, choosing the right payment solution can mean the difference between success and stagnation in an increasingly competitive market.

The future of e-commerce in Vietnam is bright, and innovative payment solutions will play a key role in unlocking its full potential.

This article was curated and authored by FinFan's market research and development team, alongside our marketing department.

About FinFan

FinFan is a cross-border embedded financial services company that focuses on mass disbursement, fund collection, card processing, IBAN, and digital APMs solutions, which can provide valuable input and integration on and for the same.

FinFan is already integrated with almost the world's well-known MTOs, PSPs, switch, and core fintech platforms such as Money Gram, Thunes, Qiwi, Remitly, World Remit, Bancore, PaySend, Terrapay, Ria Money Transfer (Euronet), Dlocal, Ripple, TripleA, FoMo Pay, Wings, etc.

For more information, please get in touch with us through:

🌐https://finfan.io

📞(+84) 2866 85 3317

✉ support@finfan.vn

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