On January 18, the National Assembly passed the Law on Credit Institutions (Law on Credit Institutions 2024), which will take effect on July 1, 2024. The Law on Credit Institutions 2024 has added regulations on payment agency activities according to regulations of the Governor of the State Bank of Vietnam (SBV).

On June 21, the Governor of the State Bank of Vietnam issued Circular No. 07/2024/TT-NHNN (Circular 07) regulating payment agent activities.

The Circular consists of 4 chapters and 14 articles, which specifically regulate payment agency activities, payment agency activities, transaction limits, activities of the principal, the agent, principles for implementing payment agency activities, payment agency contracts, rights and obligations of the parties, etc.

According to Circular 07, payment agency activities are when the principal authorizes the payment agent to perform part of the process of opening a payment account, issuing bank cards and providing payment services to customers.

Payment agents include commercial banks, cooperative banks, and foreign bank branches.

The principal is assigned to the agent to perform a number of operations including:

Receive payment account opening documents, check and verify customer identification information to send to the agent and guide customers on how to use the payment account;

Receive bank card issuance documents, check and verify customer identification information to send to the agent and guide customers on how to use the bank card;

Receive customer payment service requests, create, sign, control, process customer transaction documents, transfer customer transaction information to the agent, receive cash from customers or pay cash to customers to carry out transactions.

The principal must have measures to manage the balance and transaction limits of the agent which is another organization, including: Transaction limit for individual customers, maximum 20 million VND/customer/day.

Each payment agent point can only transact no more than 200 million VND/day and a maximum of 5 billion VND/month.

W-SHB Bank_39 Nam Khanh.jpg
Illustration photo. (Nam Khanh).

The performance of agency activities of commercial banks, cooperative banks, foreign bank branches, people's credit funds, and microfinance institutions must be consistent with the contents stated in the establishment license.

People's credit funds are agents for Cooperative Bank for members and customers of that people's credit fund.

Microfinance institutions act as agents for banks in relation to the clients of that microfinance institution.

Other organizations are legally established enterprises that are allowed to act as agents according to the agreement with the principal.

Commercial banks, cooperative banks, foreign bank branches, and microfinance institutions are allowed to act as agents for multiple principals. Other organizations are allowed to act as agents for only one principal.

The Circular takes effect from July 1, exactly when the Law on Credit Institutions 2024 officially takes effect.

The State Bank of Vietnam said that the issuance of the Circular regulating payment agency activities aims to complete the legal framework (implementation and guidance of the Law on Credit Institutions 2024), in line with the National Strategy for Inclusive Finance to 2025, with a vision to 2030; meet the practical development requirements of agency activities in the payment sector in Vietnam in the coming time, as well as grasp the development trends of the payment sector in the world, the strong and extensive development of information technology and telecommunications today.

At the same time, the issuance of the Circular also meets the goal of state management of payment agency activities of banks and foreign bank branches; aiming at the goal of universalizing comprehensive finance, creating conditions for payment services to reach rural, remote, isolated and island areas.

Tuan Nguyen