Although Vietnam is “one step behind the world”, the “Buy Now, Pay Later – BNPL” market takes place at the right time, so this new form of credit promises to also explode, accompanied by fierce competition in the coming time…

“Buy now, pay later” is going to be a leading trend in Vietnam

Hồi đầu tháng 9, đại gia trong lĩnh vực thanh toán PayPal công bố sẽ chi tới 2,7 tỷ USD để mua lại Paidy – một nền tảng “mua trước, trả sau” của Nhật Bản.

In early September, payment giant PayPal announced it would spend up to $2.7 billion to acquire Paidy – a Japanese “buy now, pay later” platform.

RACE OF GLOBAL GAINTS

Paidy allows online merchants to offer credit card payments and installments to their customers. The deal is expected to be completed in the fourth quarter of 2021, marking a new step for the US fintech giant in entering the Japanese market.

Less than a month earlier, Square Inc also revealed that it would “open the wallet” to buy Afterpay Ltd. – Australia’s “buy now, pay later” service platform with a price of up to $29 billion. About 16 million customers and nearly 100,000 sellers worldwide are using the platform. The deal is expected to give Square a large stake in the digital payments space as well as expand access for users.

The consecutive big deals from the world’s leading payment giants reflect the incredible attraction of “buy now, pay later” platforms. This is considered a new form of credit of the 21st century, in which customers do not need to pay immediately to the seller, but can pay in installments with many options of fee or no fee, or interest payment capacity within the time allowed.

Dr. Nguyen Huu Huan, Head of Financial Markets Department, University of Economics Ho Chi Minh City, said that “buy now, pay later” applications are booming globally and are very positively received by consumers. According to a Worldpay report, “buy now, pay later” services will be one of the fastest-growing forms of online payment globally over the next five years. “For example, in Australia, the ‘buy first, pay later’ app Afterpay is one of the reasons why the number of people using credit cards in this country is seriously declining, especially young customers.” , Dr. Huan said.

Explaining the explosion of “buy now pay later” platforms, Mr. On Nhu Binh, Strategic Sales Director of VNPAYQR pointed out two main reasons. Accordingly, in the world, this form of credit has appeared in recent years but really exploded when the Covid-19 pandemic took place, causing the online shopping trend to develop strongly. “2020-2021 is the golden time of Generation Z. And “buy now, pay later” is a product that meets the taste of Generation Z rather than traditional credit card,” added Mr. Binh.

VIETNAM MARKET: EXPLOSION AND COMPETITION

According to Mr. Binh, there will be two main models of “buy now, pay later” developed in Vietnam, including products of credit institutions and products provided by platforms (Atome, Fundiin, Reepay…). “The market will witness an interesting and fierce confrontation between these two models,” Binh predicted.

“Buy now, pay later” is creating a revolution in the field of consumer credit globally and is expected to explode in Vietnam in the near future thanks to the above advantages compared to credit cards and will gradually change. future credit cards. “The number of start-ups operating in this field has emerged in Vietnam and will increase exponentially in the near future in line with the world trend. The business model can be calling for foreign capital or linking with domestic and foreign banks to deploy the form of “buy now, pay later”,’ said Dr. Huan predicted.

“Buy now, pay later” possesses superior features than credit cards such as extremely simple credit granting. Accordingly, users are granted credit when it only takes a few steps to verify customer information via electronic customer identification. They also do not have to meet strict requirements such as credit card users must have such as salary payment via bank, collateral…

Users of these new credit platforms only need to create an account, satisfying basic conditions such as no bad debt at credit institutions, credit scores from good social credit rating agencies or have a good purchase history on e-commerce sites, e-wallets will be immediately granted a certain limit to spend. “This limit will be small at first, but if they pay on time and have a good credit history, the value of the limit will increase over time,” Dr. Huan explained.

The “buy first, pay later” apps are also facing a fierce competition with each other for market share after their early bloom, according to experts. “A few years later, only a few large applications will be able to survive and grow. Applications with low market share, small size, financial potential, and poor technology will self-destruct, or fail to meet the operating conditions once the State Bank issues specific regulations for the form. this”, Dr. Huan said.

POTENTIAL RISKS OF NEW TREND

“Buy now, pay later” is still essentially a credit product, so risk management still has to be taken into account. Mr. Nguyen Hai Nam, Country Director of Paretix Vietnam – Israel-based Fintech AI company specializing in providing AI-integrated data analytics solutions for credit scoring and risk management for banks and financial institutions, said that it will take some time for the market to experience and refine which products and models are most suitable for the Vietnamese market. “The manager’s actions in this period is mainly for observation,” said Mr. Nam.