i had the best pho

My recent three-week journey through Vietnam was a whirlwind of stunning landscapes, delicious street food, and fascinating cultural experiences. But as a fellow fintech nerd, I couldn't help but observe how locals conducted their daily transactions. And one thing became abundantly clear: Vietnam is experiencing a QR code payment revolution.

Like much of Southeast Asia, QR codes have become the dominant payment method in Vietnam. From bustling markets to small cafes, users – young and old – effortlessly scan QR codes to pay for goods and services. The growth has been staggering. Between January 2023 and January 2024, QR code payments witnessed a massive surge, with a remarkable 892.95% increase in volume and a 1,062.01% increase in value.

In early 2021, a significant 40% of adult consumers were already embracing QR code payments, solidifying Vietnam's position as a leader in mobile payments within Southeast Asia. Only Thailand (42%) and Malaysia (50%) boasted higher adoption rates.

VietQR → The catalyst of the Payment Revolution

VietQR, the national QR code payment standard, plays a crucial role in driving this digital transformation. Developed by the National Payment Corporation of Vietnam (NAPAS), VietQR enables interoperability between various payment service providers, ensuring seamless and secure transactions across different platforms. NAPAS reported by Q3 2023, VietQR transactions exceeded 100 million per month, a testament to its rapid growth and widespread adoption.

So how has it impacted Vietnam?

The rise of QR code payments has had a profound impact on the Vietnamese economy:

• It has massively increased Financial Inclusion → By providing a convenient and accessible payment method, QR codes have brought millions of previously unbanked or underbanked individuals into the formal financial system.

• Stimulated Economic Growth: The ease of transactions facilitated by QR codes has stimulated economic activity, particularly in the small and medium-sized enterprise (SME) sector.

• Enhanced Convenience: QR code payments offer unparalleled convenience for both consumers and businesses, eliminating the need for cash and reducing transaction times.

Challenges + a local perspective

While the rise of QR code payments in Vietnam is impressive, there are challenges. During my recent trip, I spoke with a close friend from college who’s a native who mentioned some frustrations with the system.

He pointed out that while convenient, there can be occasional glitches with interoperability between different payment platforms. For example, a transaction might fail to go through due to incompatibility issues between the merchant's QR code system and the customer's payment app.

Furthermore, Vietnam recently introduced a new law requiring biometric verification for certain transactions. While this measure aims to enhance security and combat fraud, it could potentially slow down the adoption of digital payments, especially for older or less tech-savvy users who may find the process cumbersome.

In short, my journey through Vietnam was not only a cultural immersion but also a fascinating glimpse into the future of payments. The widespread adoption of QR codes serves as a powerful example of how technology can empower individuals and transform economies.