Fintech company acquisition: Buying technology or buying licenses?

When it comes to mergers and acquisitions (M&A) deals in the field of financial technology (fintech), the question is often what technology the business owns, how many users the platform has, or how strong the engineering team is. However, as Vietnam's fintech market enters a more mature stage and the regulatory framework becomes more mature, the focus of deals has changed significantly. What investors are really looking for is no longer just technology, but access to a highly regulated market through specialized business licenses.

This makes a fintech business not only need to own a good product but also have to meet a series of legal conditions to be allowed to provide services.

A paradox that is emerging in the market is that there are companies that possess very good technology platforms but find it difficult to attract investors because they are not able to deploy services on a large scale. On the contrary, there are technology businesses that are not too prominent but are still highly valued thanks to owning a license to operate as a payment intermediary, a network of banking partners and a stable customer system. That shows that in fintech M&A, corporate value is no longer determined by technology alone but by a combination of technology, licenses and the ability to operate in a controlled regulatory environment.

Fintech is no longer the story of technology alone

Unlike most traditional technology startups, many fintech models operate in fields directly managed by state agencies such as electronic payments, e-wallets, payment gateways, money transfers, electronic customer identification (eKYC), anti-money laundering or connection to the banking system. This makes a fintech business not only need to own a good product but also have to meet a series of legal conditions to be allowed to provide services.

In the last two years, the legal framework governing this sector has changed drastically. Decree 52/2024/ND-CP on non-cash payments, Decree 94/2025/ND-CP on controlled testing mechanisms (sandbox) in the banking sector, together with the Law on Personal Data Protection 2025 and Decree 356/2025/ND-CP have significantly expanded the scope of compliance obligations for fintech enterprises. At the same time, from July 1, 2026, the new regulations on the threshold for notification of economic concentration will also have a direct impact on the structure of many M&A deals in this field.

As a result, an acquisition of a fintech company today is no longer a transaction between the seller of the technology and the buyer of the technology. It is a concurrent transaction related to banking law, competition law, investment, personal data protection, cybersecurity, and e-commerce.

The real value of the license lies in the right to enter the market

In M&A deals, many people often mistakenly believe that the value of the license lies in the document itself issued by the state agency. In fact, this is not the case.

The cost of applying for a payment intermediary license only accounts for a very small part of the total value of the business. What the buyer is willing to pay a high price is the time and business opportunity that the license brings.

For a new business to apply for a license on its own, build a system that meets technical requirements, complete the risk management process, connect with banks, sign with card organizations, and develop a customer network can take years. Meanwhile, the acquisition of a licensed legal entity, if it fully meets the legal requirements, can help investors significantly shorten the time to market.

In other words, what investors buy is not a "license", but a right to enter the market built on a history of compliance, operational systems and established business relationships.

That is also why in practice, transactions are often carried out in the form of buying shares or buying control of the legal entity that owns the license, rather than transferring the license as an independent asset. The current legal structure also does not design a separate transfer mechanism for payment intermediary licenses.

Technology still creates value, but in a different way

If licenses provide the right to operate, technology determines competitiveness.

In many deals, the buyer's goal is not to expand into the managed sector, but to own a technical platform that can be integrated immediately into the existing ecosystem. It can be an API system that connects banks, anti-fraud tools, electronic identification platforms, payment reconciliation technology, or operational datasets that have been legally formed over the years.

It's worth noting that the value of these assets is no longer merely judged by the number of lines of code or the number of engineers. Investors are increasingly interested in the scalability of the system, the quality of the software architecture, the security of the API, the ability to automate the process, the history of troubleshooting, and the level of compliance with international cybersecurity standards.

A platform can process millions of transactions per day but an insecure API design or the use of a lot of unmanaged open-source components can still incur huge remediation costs after acquisition. At that time, technology is no longer an asset but becomes an obligation to be disposed of.

Similarly, customer data is only valuable when collected and processed on a lawful basis. In the context that the Law on Personal Data Protection 2025 has come into effect, a large data warehouse that fails to prove the basis for processing or the valid consent of the data subject can significantly reduce the value of the deal, even becoming a source of liability for the buyer.

Buying technology or buying licenses?

In fact, these are not two opposite options but two different investment strategies.

If the investor already owns an operating license or can deploy the service through an existing ecosystem, buying the technology is usually more efficient. They can quickly integrate new products into the existing platform without having to shoulder the historical obligations of the target business. Conversely, if the goal is to quickly enter the payments market, reach corporate customers, or take advantage of an established network of banking partners, acquiring the legal entity that owns the license will make greater strategic sense. However, the advantage of speed always comes with risks.

Different from buying technology assets, buying a legal entity means receiving the entire history of the business's operation. Investors may have to inherit unprocessed tax obligations, anti-money laundering violations, cybersecurity incidents, disputes with customers, or deficiencies in the protection of personal data.

Therefore, in today's fintech deals, the most time-consuming part is often not negotiating the purchase price but the process of legal due diligence, technology appraisal and compliance assessment before signing the transaction.

A notable change in the market is the way fintech businesses are valued.

Fintech valuations are changing

A notable change in the market is the way fintech businesses are valued.

In the past, many startups were valued primarily based on user growth or future growth expectations. Currently, investors are increasingly using two different "value bridges". For technology, value is determined from the cost of replacement, shortened time to product development, scalability, and economic efficiency when operating on a large scale.

Meanwhile, the value of a license is measured by the rate of revenue generation in the conditional sector, the ability to maintain relationships with banks and payment partners, the quality of the compliance system as well as the probability of continuing to operate stably after the transaction.

This explains why two businesses have similar revenues but can be valued very differently if one has a better compliance system or a long history of cooperation with large financial institutions.

Lessons from international deals

Many fintech M&A deals around the world show that investors are not only buying technology or licenses, but are buying a strategic position in the digital financial ecosystem.

Gojek's purchase of Moka in Indonesia is not simply to own a sales management software[1]. The greatest value lies in the ability to connect payments, manage stores, and the food delivery ecosystem on the same platform.

In Nium's purchase of Ixaris[2], what is attractive is not the payment software but the network of licenses, the capacity to operate cross-border payments and relations with international financial institutions. On the other hand, Visa's intention to buy Plaid[3] shows that even if the technology is very attractive, the transaction can still fail if it creates concerns about competition in the digital financial market.

These examples reflect a general trend: the value of fintech increasingly lies in its ability to combine technology, data, licenses, and business networks rather than any individual elements.

The future of fintech M&A in Vietnam

Vietnam's fintech market is entering a new phase. Increasingly complete legal regulations will make businesses with a good compliance system more attractive in the eyes of investors. In contrast, fast-growing companies that neglect risk management may face significant discounts on fundraising or transfers.

The most important thing for the buyer is not to choose between technology and licenses, but to identify the right source of value creation for the deal. If the value lies in technology, price it as a technology business. If the value lies in the right to enter the market, the appraisal is like an acquisition of an organization operating in a regulated sector.

The most common mistake in fintech deals is not to overprice, but to misjudge the nature of the asset you are buying. Paying a price like buying a license but only appraisal like buying a piece of software, or vice versa, can make the expected competitive advantage quickly turn into a burden after the transaction is completed.

In the context of the fast-growing digital economy and increasingly tight legal framework, the question "buy technology or buy licenses?" may no longer be a choice between the two. For many fintech M&A deals, success depends on the ability to correctly identify the right combination of technology,  licenses, data, and compliance capabilities. It is that combination that is the asset that creates a sustainable competitive advantage and determines the true value of the business in the long term.

Lawyer Nguyen Van Phuc

HM&P Law Firm