Circular 18 of the State Bank of Vietnam on the activities of bank cards
Who does Circular 18/2024/TT-NHNN apply to regarding the activities of bank cards in Vietnam? Which organization is authorized to issue bank cards in Vietnam? What is a bank card according to the law in Vietnam? What currency is used in bank card transactions in Vietnam?
Circular 18/2024/TT-NHNN on the activities of bank cards
On June 28, 2024, the Governor of the State Bank of Vietnam issued Circular 18/2024/TT-NHNN, which regulates the activities of bank cards.
The Circular 18/2024/TT-NHNN applies to the following entities:
- Card issuing organizations.
- Card payment organizations.
- Intermediary payment service providers.
- Card accepting units.
- Cardholders.
- Other organizations and individuals involved in card activities.
Circular 18/2024/TT-NHNN officially takes effect from July 1, 2024.
Circular 18 of the State Bank of Vietnam on the activities of bank cards - image from internet
What is a bank card according to the law in Vietnam? What currency is used in bank card transactions in Vietnam?
In Clause 1, Article 3 of Circular 18/2024/TT-NHNN, the specific explanations are as follows:
Explanation of Terms
In this Circular, the following terms are understood as follows:
1. Bank card: A payment instrument issued by a card issuing organization to facilitate card transactions under agreed conditions and terms.
2. Debit card: A card that allows the cardholder to make card transactions within the amount and spending limit (if any) on the cardholder's payment account opened at the card issuing organization.
3. Credit card: A card that allows the cardholder to make card transactions within the credit limit granted according to the agreement with the card issuing organization.
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As regulated above, a bank card is a payment instrument issued by a card issuing organization for conducting card transactions under agreed conditions and terms.
In addition, based on Article 4 of Circular 18/2024/TT-NHNN, the currency used in bank card transactions is regulated as follows:
Currency used in card transactions
1. Within the territory of Vietnam:
a) Cash withdrawal transactions using a card must be conducted in Vietnamese Dong.
b) For other card transactions:
(i) The transaction currency is Vietnamese Dong. In cases where foreign currency is allowed for transactions under foreign exchange management regulations, the transaction currency can be Vietnamese Dong or Vietnamese Dong and foreign currency.
(ii) The payment currency is Vietnamese Dong. Authorized card payment service providers can only receive payment in Vietnamese Dong from cardholders.
c) In cases where currency conversion from foreign currency to Vietnamese Dong is required, the exchange rate between Vietnamese Dong and foreign currency is determined by the agreed-upon rate between the parties involved, in compliance with the regulations of the State Bank of Vietnam.
2. Outside the territory of Vietnam:
When conducting card transactions outside the territory of Vietnam, the cardholder must make payment to the card-accepting institution in Vietnamese Dong, based on the exchange rate agreed upon between the parties, in compliance with the regulations of the State Bank of Vietnam.
As regulated above, the currency used in bank card transactions is specified as follows:
First: Within the territory of Vietnam:
- Cash withdrawal transactions using a card must be conducted in Vietnamese Dong.
- For other card transactions:
- The transaction currency is Vietnamese Dong. In cases where foreign currency is allowed for transactions under foreign exchange management regulations, the transaction currency can be Vietnamese Dong or Vietnamese Dong and foreign currency.
- The payment currency is Vietnamese Dong. Authorized card payment service providers can only receive payment in Vietnamese Dong from cardholders.
- In cases where currency conversion from foreign currency to Vietnamese Dong is required, the exchange rate between Vietnamese Dong and foreign currency is determined by the agreed-upon rate between the parties involved, in compliance with the regulations of the State Bank of Vietnam.
Second: Outside the territory of Vietnam:
When conducting card transactions outside the territory of Vietnam, the cardholder must make payment to the card-accepting institution in Vietnamese Dong, based on the exchange rate agreed upon between the parties, in compliance with the regulations of the State Bank of Vietnam.
Which organization is authorized to issue bank cards in Vietnam?
Based on Article 8 of Circular 18/2024/TT-NHNN, the issuance of bank cards includes the following provisions:
Card issuing organizations
1. Card issuing organizations include:
a) Commercial banks, cooperative banks, and branches of foreign banks that have been granted a License by the State Bank of Vietnam to provide card services.
b) Policy banks that issue cards in accordance with the regulations of the Government and the provisions of this Circular.
c) Integrated financial companies and consumer credit financial companies that issue credit cards when their card issuing activities are specified in the License granted by the State Bank of Vietnam.
2. Card-accepting institutions must comply with the domestic chip card standards when issuing cards with a BIN granted by the State Bank of Vietnam.
3. Card-accepting institutions must issue internal regulations on card issuance and card usage to ensure compliance with the provisions of this Circular and relevant laws and regulations.
4. Card-accepting institutions must use BINs granted by the State Bank of Vietnam, except in cases specified in Clause 5 of this Article.
5. Card-accepting institutions that are permitted to operate in foreign exchange may enter into agreements with international card organizations to issue cards with BINs granted by these organizations.
6. Card-accepting institutions are not allowed to enter into agreements with other organizations for the purpose of restricting or preventing the issuance of co-branded cards.
As regulated above, the issuance of bank cards includes:
- Commercial banks, cooperative banks, and branches of foreign banks that have been granted a License by the State Bank of Vietnam to provide card services.
- Policy banks that issue cards in accordance with the regulations of the Government and the provisions of this Circular.
- Integrated financial companies and consumer credit financial companies that issue credit cards when their card issuing activities are specified in the License granted by the State Bank of Vietnam.
