With $9.2 Million Investment from SMBC, How SmartPay Support SMEs to Approach Big Customers?

Statistics released by the State Bank of Vietnam (SBV) show that as of September 2022, nearly 14 million clients had used cashless payment services. As many as 2.34 million mobile money accounts had been opened, of which 1.62 million or 69.23% were in rural and islands areas.

Three units, licensed to provide such services on a pilot basis, have established more than 82,200 transaction sites, and 14,500 units have accepted cards, which has facilitated cashless payments.

However, cashless payment services have yet to be completely convincing to MSMEs as the businesses are operating at a small scale and vulnerable to changes in the business environment.

Marek Forysiak, Founder and Executive Chairman of SmartPay, viewed MSMEs as “the heart” of the Vietnamese economy, which made up nearly 70% of the national GDP in 2020.

Vietnam is among the most promising markets in Southeast Asia, he said, noting that the country is expected to grow 175% by 2025 to become the region’s second biggest economy.

Cash payments in Vietnam dropped from 86% in 2017 to 54% in 2021, which has generated both advantages and challenges to small merchants since they are forced to quickly adopted the changes to compete against major brands in the wave of digital transformation.

The segment of 4 million small and medium-sized retailers contributed half of the total retail sales in Vietnam last year with about $210 billion USD, of which small merchants contributed $100 billion. The segment expands about 10% each year, and the value would rise from $100 billion to $200 billion in the next seven years.

Aware of such potential and demand, various fintech firms have offered technological solutions to both businesses and users. Among them, SmartPay operated by SmartNet has been seen as a comprehensive and preeminent financial service supply platform targeting MSMEs.

Since its inception in 2019, SmartPay has decided to accompany millions of local small merchants, helping them access more advanced and economical technologies.

SmatPay has enabled merchants to accept all forms of payments while making it easier for them to access corporate loans regardless of their scale.

Unlike other financial institutions, SmartPay puts small merchants at the centre, he said, adding that SmartPay focuses on providing, developing and designing solutions for SMEs, while other banks and financial institutions target different segments.

SmartPay is not just an app, but it is providing comprehensive solutions to help small merchants do better business and such products are developed exclusively to satisfy different needs of sellers.

SmartPay has flexibly adjusted its products with additional services for small and medium-sized sellers, Forysiak said.

He stressed that SmartPay’s target customers are small merchants and businesses, and shop owners in Vietnam, whose transactions are averaged from only $1-2. Therefore, its competitiveness lies with how to serve the segment at a cost as close to zero as possible.

It is not easy for other big financial institutions to process such small transactions like those valued at only about VND5,000 - 15,000 with the same cost that SmartPay offers, he said, noting that its customers would be street vendors, noodle sellers, food vendors and grocery stores.

Over the past nearly three years, the company has recorded many positive results. The accumulative Gross Merchandise Value (GMV) via SmartPay reached $4.5 billion. In 2022 alone, the revenue through the platform is estimated at $16 million USD, up 71% from 2021. More than 740,000 units have accepted SmartPay, which is being used by tens of millions of people.

With its great potential and right path, SmartNet has been recently invested by SMBC, part of Japan’s Sumitomo Mitsui Financial Group, with $9.2 million.

In an announcement, SMBC said the deal helps expand its “Asia franchise” and strengthen its digital banking capabilities in the region.

Forysiak said the agreement with SMBC is an important step in the company's strategy to advance the corporate life of MSMEs and become a leading service supply platform for sellers in Vietnam.

The SMBC investment is part of SmartNet’s $30 million series A round, he said, adding that apart from providing preeminent payment solutions, SmartPay also opens up opportunities for merchants to increase their revenue with services such as buy now pay later services, flexible consumer credit or credit card installment that had been only provided to the largest retail chains in Vietnam previously.

Moreover, this is also part of SmartPay’s strategy to become the No. 1 supplier of SmartPOS, a payment acceptance device, in Vietnam, Forysiak, expressing a hope that the investment will provide a financial source big enough to help realise the above goal with 100,000 SmartPOS to be launched in the market in early 2023./.

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