Vietnam is rapidly emerging as one of the financial and digital leaders in Southeast Asia with its innovative bunch of payment rails which are designed to propagate financial inclusion and reduce reliance on cash. At the centre of this transformation are the core rails - Vietnam’s NAPAS (National payment corporation of Vietnam) and VietQR payments, which together are crucial to the infrastructure and are shaping the Vietnam payment system. As cashless adoption is accelerating in the country, understanding what NAPAS is in Vietnam and how VietQR works and accommodating payments becomes extremely important - understanding of which would help decode and build on the fintech ecosystem in the country which is essential for businesses, startups and global enterprises in the region. 

What is NAPAS? 

NAPAS (National Payment Corporation of Vietnam) is the backbone of Vietnam’s digital payment ecosystem. It was established under the State bank of Vietnam, NAPAS serves as the national switch and clearing house for interbank transactions. It enables seamless seamless networks among banks, e-wallets and financial institutions. With over 50 banks and fintech partners, NAPAS connects millions of consumers and businesses to real time, secure payment networks. Key functions of NAPAS;

1. National switching for card and non card payments.

2. Interbank fund transfers and clearing services. 

3. Enables real-time payments in Vietnam across banks and fintechs. 

4. Supports cashless payment systems and governments vision towards a cashless society. 

Understanding VietQR

VietQR is Vietnam’s standardised payment system developed under NAPAS and the Vietnam Bank association. Let’s understand how VietQR works;

1. Customers simply scan the merchant’s VietQR code using their mobile banking app.

2. The app directly connects via NAPAS rails to initiate the transfer.

3. Funds are then instantly transferred from the customer’s bank account to the merchant’s bank account. 

VietQR comes with a lot of advantages such as;

1. Interoperability - it functions across multiple banks and wallets and not just a single provider.
2. Speed - it accentuates the speed by providing real time transfers. 

3. Low cost - it reduces merchant and customer reliance on card networks which often come with high fees.

4. Ubiquity - VietQR’s adoption is expanding rapidly across retail, ecommerce and services. 

The role of NAPAS and VietQR in Vietnam’s payment system 

1. Together, these two systems form the foundation of modern payment systems in Vietnam.

2. Where NAPAS provides rails and VietQR provides the connectivity and the interface for cashless transactions - the two systems bundle up as an end to end payment service.

3. They both support strong connectivity across Vietnam's banking and payments systems - banks, mobile wallets and payment platforms.

4. This model has successfully positioned itself as the potential leader in South Asia’s payment innovations. 

Growth drivers of digital payments in Vietnam

1. Government policies - The state Bank of Vietnam actively promotes cashless transactions making the foundation of payment innovation stronger.

2. Consumer behavior - Young, mobile first population drives ewallet and digital payment adoption via banking apps and other digital initiatives.

3. SME enablement - VietQR enables small merchants and industries of all sizes to adopt and accept cashless payments without heavy POS terminals. 

4. E-commerce expansion - Vietnam’s booming digital economy demands solutions to suit its digital needs of fast, secure and cost effective payment solutions.

5. Fintech and banking collaborations - NAPAS ensures seamless integration between incumbents and startups. 

Fintech in Vietnam and future of payments 

As a result of constant effort and growth, the fintech ecosystem in Vietnam is thriving with startups innovating in forward heading industries like wealth management, insurance and lending. Digital payment systems are expanding their services leveraging NAPAS rails for realtime payments in Vietnam. Vietnam's digital model can be seen as a blueprint for Southeast Asia payment innovation. 

With a thriving market like this, Vietnam’s industries need the right partner for integration and adoption of the modern payment rails and to best leverage and innovate within their systems for a bright financial future. Partnering with payment platforms like TransFi which integrate easily with the local rails can ease down the process to minimal steps, low costs and highly transparent and secure payment networks. TransFi is helping many countries in the global realm embrace a better future with the ease of the best services and interface at power by connecting users with over 100+ currencies, 250+ local payment methods, and 80+ digital assets, giving both senders and receivers control, speed, and cost savings. To explore payment rail solutions in Vietnam, get in touch with the expert team at TransFi and expand your financial empire across the country and beyond.  

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Benefits of NAPAS, VietQR and TransFi integrations for businesses

Among the many benefits and ease of adoption as well as transition, some include;

1. Low transaction costs 

Businesses can reduce fees compared to card networks and third party payment intermediaries.

2. Faster cash flow 

Real time settlements improve liquidity for SMEs as well as large enterprises.

3. Increased acceptance 

Standardized QRs ensure that merchants can accept payments from any bank or wallets and other digital means.

4. Seamless integration 

NAPAS rails connect banks, fintechs and businesses in a frictionless network with seamless initiation and onboarding. 

5. Financial inclusion 

Small merchants and rural communities, underbanked and unbanked can all access and adopt these systems easily.

6. Improved customer experience 

Consumers enjoy faster, more secure and convenient transactions without the hassle of complex systems and elongated steps. 

Ready to connect your business with Vietnam’s highly efficient payment rails via TransFi to become a part of the digital payment ecosystem? Talk to our team of experts today and get the best solution at the earliest with TransFi! 

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Frequently asked questions (FAQs)

1. What is NAPAS in Vietnam?

NAPAS (National Payment Corporation of Vietnam) is the backbone of Vietnam’s digital payment ecosystem. It enables seamless seamless networks among banks, e-wallets and financial institutions.

2. How does VietQR work?

VietQR is Vietnam’s standardised payment system developed under NAPAS and the Vietnam Bank association. Customers simply scan the merchant’s VietQR code using their mobile banking app and initiate payment which gets settled instantly via NAPAS rails. 

3. What are the benefits of cashless payments in Vietnam?

Cashless payments in Vietnam reduces frauds, improves efficiency and increases financial inclusion.

4. What is the future of payments in Vietnam?

Vietnam’s payment industry is constantly moving towards innovation, seamless integrations with fintech and cashless adoption. It is expected to thrive as a leader of digital payments in the Southeast Asian region.  

5. How can partners like TransFi help businesses in Vietnam?

Partnering with payment platforms like TransFi which integrate easily with the local rails can ease down the process to minimal steps, low costs and highly transparent and secure payment networks for businesses.