Dung Đặng, Visa country manager for Vietnam and Laos, makes a speech at an event entitled “New Flows Client Forum”. — Photo courtesy of Visa Vietnam

HCM CITY — In Việt Nam, business-to-business (B2B)-focused fintech presents new revenue and growth streams for enterprises of all sizes, experts said. 

A recent McKinsey study noted that business disruptions caused by the pandemic have pushed companies to accelerate their digital journeys. This has fueled B2B e-commerce, and the trend is here to stay as B2B buyers are increasingly comfortable with digital channels.

“The B2B e-marketplace is booming, and it’s the perfect time for Việt Nam’s small and medium-sized enterprises (SMEs) to take part in this continued growth,” said Dung Đặng, Visa country manager for Vietnam and Laos at an event entitled “New Flows Client Forum.”

“Various industry verticals are seeing increasing use of B2B marketplaces, and in Việt Nam, the agriculture, B2B travel, and FMCG sectors are likely to benefit greatly from enhanced supply chain access, ease of payment options and capabilities, and high revenue growth potential,” she added.

Dung also stressed that financial institutions should be able to also capitalise on this opportunity by supporting issuance for trusted partners. “Issuers should then leverage marketplace partnerships as acquisition channels – through cobranded cards, they are able to support improved B2B payment capabilities while also expanding their customer base.”

B2B relationships are vastly different from business to consumer (B2C), as buyers and suppliers often have long-term relationships. 

Interoperability is key to closing the gaps, allowing consumers and merchants from different markets and payment schemes to do business seamlessly around the world.

As B2B e-commerce strongly develops, digital payments have been steadily rising, with the shift to online payments most seen among emerging consumer groups. 

Online marketplaces and payment portals for various services and utilities have become preferred channels for consumers comfortable with using these secure means of shopping and paying for purchases. 

According to Visa’s Consumer Payment Attitudes Study 2022, over 70 per cent of Vietnamese consumers are generally receptive to open banking, especially fintech and non-bank service providers that can open an account for them using their existing data with banks.

The ever-growing fintech space, however, presents growth not only for B2C companies. B2B enterprises across various industries can similarly leverage fintech to tap new markets for rewarding opportunities. Traditionally, commercial card-based payments have been used to support travel and entertainment-related business’s expenses. However, an increasing number of industry verticals are now using digital B2B payment solutions to respond to challenges within supply chain payments.

“There are a lot of recognised pain points in the supply chain setup of old,” said Gareth Jon Parrington, senior director, head of New Flows, Visa Asia Pacific. 

“Whether from the manufacturer to distributor phase, to the distributor to retailer phase, issues abound, such as managing credit and payment risks, the inability to provide credit lines and limits, limited capital, and the risk of loss and fraud. Digitising payment collections, however, provides a range of benefits – from improving data and enhancing visibility for business analytics to eliminating risk of cash and cheque handling, among others.”

Fintech has also responded to the challenges brought on by cross-border payments. With the emergence of B2B e-marketplaces, which need to ensure a fast and smooth payout to sellers on their platforms, solutions such as virtual cards allow for the elimination of cross-border wire transfer complexities and enable improved data transparency and reconciliation. — VNS