Will the Circular on the regulations for the provision of payment intermediary services in Vietnam be effective from July 17, 2024?
Will the Circular on the regulations for the provision of payment intermediary services in Vietnam be effective from July 17, 2024?
On July 17, 2024, the Governor of the State Bank of Vietnam issued a Circular stipulating regulations on payment intermediary service provisions.
Circular 40/2024/TT-NHNN specifies provisions related to the operation of payment intermediary services.
The applicable entities of Circular 40/2024/TT-NHNN include:
- Organizations providing payment intermediary services.
- Banks, foreign bank branches.
- Other related organizations and individuals involved in payment intermediary services.
Circular 40/2024/TT-NHNN consists of 5 Chapters with 54 Articles.
Will the Circular on the regulations for the provision of payment intermediary services in Vietnam be effective from July 17, 2024?
What are regulations on currency used in electronic transactions according to Circular 40/2024/TT-NHNN in Vietnam?
According to Article 7 of Circular 40/2024/TT-NHNN, the regulations on currencies used in transactions are stipulated as follows:
- Non-cash payment transactions via payment intermediary services within Vietnamese territory must be conducted in Vietnamese Dong, except for foreign exchange usage cases within Vietnamese territory, complying with laws on foreign exchange management.
- If a foreign organization provides payment intermediary services to non-resident customers and residents in Vietnam for transactions of goods and services within Vietnam, the payment acceptance unit in Vietnam must receive payments in Vietnamese Dong, except for cases allowed to receive foreign currency as per laws on foreign exchange management.
- Should a payment intermediary service provider (except financial switching service provider) accept a transaction for foreign goods and services, the currency used by customers must be Vietnamese Dong.
- The conversion from foreign currency to Vietnamese Dong (or vice versa), and exchange rates between Vietnamese Dong and foreign currencies, shall follow agreements between the parties adhering to legal regulations.
What are safety regulations for payment intermediary service provisions in Vietnam from July 17, 2024?
Article 9 of Circular 40/2024/TT-NHNN outlines the safety regulations in providing payment intermediary services as follows:
1. Before providing services to customers, payment intermediary service providers must issue internal procedures related to payment intermediary services, including at least:
- Technical procedures for payment intermediary services covering the following: service name, supply scope, customer type, usage conditions, process flowchart, detailed explanation of operational steps, and cash flow process from transaction initiation to settlement among involved parties for e-wallet and support collection/payment services.
- Internal control and inspection procedures detailing: purpose, requirements, execution steps, and department responsibilities.
- Risk management and safety assurance procedures, including:
+ Compliance with risk management and safety assurance directives of the State Bank in electronic banking activities;
+ Compliance with electronic document management as per e-commerce laws in banking activities;
+ Risk assessment and management measures relevant to the provision of payment intermediary services;
+ Internal policies for specific risk handling measures;
- General principles and internal regulations on anti-money laundering (AML), counter-terrorism financing (CFT), and combating the proliferation of weapons of mass destruction (WMD), including:
+ General AML/CFT/WMD principles;
+ Internal AML/CFT/WMD regulations in line with legal requirements;
- Complaints, disputes, and investigation handling procedures following State Bank regulations on non-cash payment service provisions, covering:
+ Complaint resolution guidelines, indicating clear channels, departments, customer complaint procedure, internal execution, and necessary collaboration with relevant units;
+ Specific steps, timeframe, and outcomes for complaint resolution;
- For international financial switching services: internal standards for selecting international payment systems, and internal procedures with risk management measures for such services.
2. Payment intermediary service providers must regularly review and update internal procedures to reflect real-time service supply and legal adherence.
3. Providers must comply with technical safety standards for card payment equipment, information system security in banking, and provide secure online services, embracing safety solutions in online and card payments.
4. Before service provision, organizations licensed by the State Bank must publicly disclose the following on their official websites: Licensed payment intermediary services by the State Bank; Service forms provided; Service names/brands.
5. Providers must account for and monitor revenue/expenditure related to intermediary services distinctly from other business activities and maintain separate accounting for each licensed intermediary service.
6. When directly contracting with payment accepting units (without participating banks), providers must fulfill the same responsibilities as payment service providers per non-cash payment service regulations of the State Bank.
7. If cooperating with another provider of products/services (partners), payment intermediary service providers must formalize contracts or agreements with partners covering:
- Partner collaboration details;
- Responsibility bifurcation for service/product provision and associated risks;
- Point of contact for customer issues;
- Conditions for business operations;
- Risk advisories for customers (if any);
- Informing customers on specified details before service usage as prescribed in points a, b, c, d, dd of this Clause.
LawNet