Agreement on card issuance and usage is required before issuing bank cards in Vietnam

Agreement on card issuance and usage is required before issuing bank cards in Vietnam (Internet image)

Regarding this issue, LawNet would like to answer as follows:

1. What is a bank card?

According to Clause 1, Article 3 of Circular 19/2016/TT-NHNN, a bank card means an instrument issued by a card issuer for conducting card transactions under the conditions and terms agreed upon by the involved parties.

Cards regulated in Circular 19/2016/TT-NHNN do not cover types of cards issued by good suppliers or service providers for the purpose of use in the payment for goods and services for the card issuers themselves.

2. Agreement on card issuance and usage is required before issuing bank cards in Vietnam

Procedures for issuing bank cards are carried out in accordance with Article 10 of Circular 19/2016/TT-NHNN (amended by Circular 26/2017/TT-NHNN and Circular 17/2021/TT-NHNN), specifically as follows:

- A card issuer in Vietnam must lay down internal regulations on card issuance within its system.

When issuing non-physical cards, a card issuer must formulate documents on process of card opening and closing, process of card transactions, process of risk management (including the following steps: Identification, measure, control and actions against risks), scope of card usage and measures for control of card usage within the agreed scope.

- Before issuing a new card model or changing the current card model, the card issuer must submit a notification of card model to be issued to the State Bank of Vietnam according to the template stated in the Appendix enclosed with Circular 19/2016/TT-NHNN. If issuing non-physical cards, the card issuer must enclose this written notification with documents about the issuance of non-physical cards as specified in Clause 1 of Article 10 of Circular 19/2016/TT-NHNN.

- When a principal cardholder requests a card issuer to issue a debit card, the principal cardholder is required to have a payment account opened at such card issuer.

- Any arrangement on card issuance and usage must be made in the form of agreement on card issuance and usage in accordance with this Circular and relevant law provisions.

The contents of the agreement shall comply with Article 13 of Circular 19/2016/TT-NHNN.

- Before entering into an agreement on card issuance and usage, the card issuer must request the cardholder to provide sufficient information and necessary documents for identification as prescribed by law on anti-money laundering.

If a card is issued to a foreigner, the card issuer must request such foreign cardholder to provide necessary documents for verification of his/her stay in Vietnam, including:  passport, visa, certificate of visa exemption, certificate of temporary residence, temporary residence card, employment contract, admission decision or other documents proving his/her stay in Vietnam.

Other necessary documents of customer upon entering into an agreement on card issuance and usage, which are originals, or copies accompanying originals for comparison, or electronic copies, or authenticated copies or copies, issued from master register as per the law.

In case the copies are presented with the originals for comparison, the card issuer shall bear the certification in the copies and be liable for the accuracy of the copies compared to the originals.

If the documents are electronic copies, the card issuer shall use technology to collect, inspect and compare to ensure that the electronic copies contain adequate, accurate particulars and match the originals as per the law.

- Card issuers in Vietnam must use BIN issued by the State Bank, other than regulations in Clause 7 of Article 10 of Circular 19/2016/TT-NHNN.

- Any card issuer in Vietnam that enter into an agreement on co-branded card with an international card association is entitled to use the BIN issued by such international card association.

- Card issuers may not agree with other organizations to restrict the issuance of co-branded cards.

- When the issuance of a card model is suspended, the card issuer must sent notification in writing to the State Bank for management.

- The card issuer may issue debit cards, credit cards, personalized prepaid cards to principal cardholders who are individuals using electronic method. The individual cards using electronic method shall be issued in accordance with this Article and Article 10a of Circular 19/2016/TT-NHNN.

Therefore, the issuance and use of bank cards must be made into a contract.

3. Eligible entities for bank cards in Vietnam

(1) For principal cardholders being individuals:

- Any person who is 18 years of age or older and has full legal capacity as prescribed by law is permitted to use debit cards, credit cards and/or prepaid cards;

- Any person who is 15 to less than 18 years of age and does not have lack of legal capacity or limited legal capacity is permitted to use debit cards, credit cards and prepaid cards.

(2)  For principal cardholders being organizations:

Organizations eligible to open checking accounts may use debit cards. 

Organizations being juridical persons duly established and operating under Vietnamese law may use credit cards and personalized prepaid cards. 

A cardholder being an organization may authorize an individual to use the organization’s card or to use a supplementary card as prescribed in this Circular.

(3) With respect to supplementary cardholders:

A supplementary cardholder may use card as specific authorization of the principal cardholder in accordance with the following requirements:

- An person who is 18 years of age or older and has full legal capacity as prescribed by law is permitted to use debit cards, credit cards and/or prepaid cards;

-A person from 15 to under 18 years old whose legal capacity is not completely or partially limited may use debit cards, credit cards and prepaid cards;

-A person who is 6 to less than 15 years of age, does not have lack of legal capacity or limited legal capacity, and obtains an authorization in writing made by his/her legal representative to permit him/her to use card shall be permitted to use a debit card or a pre-paid card.

(4)  In addition to the requirements for eligibility to use cards as specified in (1), (3), a foreigner is considered eligible to use cards if he/she is permitted to stay in Vietnam for 12 months or longer..

(Article 16 of Circular 19/2016/TT-NHNN (amended in Circular 26/2017/TT-NHNN, Circular 28/2019/TT-NHNN, Circular 17/2021/TT-NHNN)

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