New regulations on cashless payment in Vietnam 2024

In recent years, cashless payment has become increasingly popular. According to updated data from the State Bank of Vietnam, as of the end of Q1 2024, cashless payment activities continue to achieve positive results compared to the same period last year. The clearing and financial transaction switching system increased by 39.06% in quantity and 20.64% in value. Cashless payment transactions increased by 56.57% in quantity and 31.35% in value; via Internet channels increased by 48.81% in quantity and 25.73% in value; via mobile phone channels increased by 58.70% in quantity and 33.12% in value. Recently, the Government has issued Decree 52/2024/ND-CP regulating cashless payment. The following analysis by Viet An Law will highlight the key points in these new regulations on cashless payment in Vietnam 2024.

Summary of Decree 52/2024/ND-CP

On May 15, 2024, the Government issued Decree 52/2024/ND-CP guiding the regulations on cashless payment.

Decree 52/2024/ND-CP regulates cashless payment activities, including:

This Decree comes into effect from July 1, 2024, and replaces Decree 101/2012/ND-CP on cashless payment, which was amended and supplemented by Decree 80/2016/ND-CP and Decree 16/2019/ND-CP.

The Decree is structured into Chapters, Articles, Clauses, and Points, comprising 07 Chapters and 38 Articles. In this Decree, there are several notable new points that Viet An Law will analyze below.

Important new points of Decree 52/2024/ND-CP

Supplementing regulations on electronic money (e-money)

• Clarifying the definition and nature of electronic money: According to Clause 12, Article 3 of Decree 52/2024/ND-CP, e-money is the value of Vietnamese Dong (VND) stored on electronic means provided based on the amount prepaid by customers to banks, foreign bank branches, or payment intermediary service providers supplying e-wallet services. In this context, e-wallets and prepaid cards are the means of storing e-money.
• Clarifying the entities providing e-money: Banks, foreign bank branches (providing e-wallet and prepaid card services), and payment intermediary service providers (providing e-wallet services linked to the payment accounts of customers opened at banks).
• Regulations on the forms of e-money: E-wallets and prepaid cards are the means of storing e-money.

This is new content on e-money, a concept not previously mentioned in Decree 101/2012/ND-CP.

The difference between the concept of e-money and current cryptocurrencies (crypto)

The new definition of e-money differs from the current understanding of e-money (such as cryptocurrencies). The differences between e-money and cryptocurrencies are as follows:

• E-money is guaranteed by the State (issued by the State Bank), while the State does not guarantee cryptocurrencies and is not guaranteed by any organization.
• E-money has a certain physical form and exists independently, whereas cryptocurrencies always rely on the digital environment to exist.

Therefore, cryptocurrencies are not guaranteed to be convertible into fiat in Vietnam. No organization is responsible for the risks to one or more parties involved in transactions related to cryptocurrencies.

As a result, cryptocurrencies are not yet recognized as a legal means of payment in Vietnam. It is necessary to supplement regulations to clarify the nature of e-money to ensure consistency and exclude cryptocurrencies and tools used as payment methods that are not subject to regulatory oversight. This provides a legal basis for the State Bank and related ministries to effectively perform their regulatory roles. This also supports competent authorities in preventing and combating legal violations in the field of e-money (according to the Project on completing the legal framework to manage and handle virtual assets, e-money, and cryptocurrencies, approved by the Prime Minister under Decision 1255/QD-TTg).

Supplementing regulations on international payment

Decree 52/2024/ND-CP has supplemented and clarified issues regarding international payment as follows:

• Clarifying the concept of international payment and the international payment system in Article 3. Accordingly, international payment is a payment transaction conducted for a party that is an organization or individual with a payment account or payment means issued outside the territory of Vietnam.
• Regulations on the provision of services from abroad into Vietnam and from Vietnam abroad, and the implementation of international financial switching services (Article 5).
• Regulations on the approval for participation in international payment systems by commercial banks, and foreign bank branches, and the conditions for approval (Article 5).
• Regulations on the responsibility of relevant parties to provide complete and timely information and to meet the requirements of state regulatory authorities under Vietnamese law to manage cross-border transaction flows (Article 5).

The regulations on international payment in Decree 52/2024/ND-CP aim to enhance the regulatory role of state management agencies in international payment activities and to promote cross-border payment service cooperation models in the context of technological development, innovation, and increasing support for e-commerce payments.

Regulations on opening and using payment accounts

Decree 52/2024/ND-CP has provided detailed regulations on opening and using payment accounts as follows:

Regulations on dossiers and procedures for opening and closing payment accounts at the State Bank of Vietnam

While Decree 101/2012/ND-CP only regulated the cases of opening and closing payment accounts, Article 14 of Decree 52/2024/ND-CP has provided detailed guidelines on the dossiers and procedures for opening and closing payment accounts at the State Bank of Vietnam for credit institutions, foreign bank branches, and the State Treasury. Specifically:

• Regulations on the principles of preparing and submitting dossiers;
• Regulations on the dossiers for opening payment accounts at the State Bank;
• Regulations on the procedures for opening payment accounts: Accordingly, when there is a need to open a payment account, the organization requesting the account opening shall send one set of account opening documents to the State Bank (Transaction Office, State Bank branches in provinces and cities) where the payment account is requested to be opened.
• Regulations on the procedures for closing payment accounts.

Supplementing regulations on opening and using payment accounts between credit institutions and foreign bank branches

While Article 9 of Decree 101/2012/ND-CP only regulated the opening and use of payment accounts between credit institutions, Article 15 of Decree 52/2024/ND-CP has supplemented cases of opening and using payment accounts between credit institutions and foreign bank branches.

This new regulation allows transactions to open accounts between foreign bank branches. However, it should be noted that payment accounts opened between credit institutions and foreign bank branches are only for payment purposes and cannot be used for lending, overdrafts, or other purposes.

Amending regulations on opening payment accounts for non-credit institution customers

• Article 16 of Decree 52/2024/ND-CP has abolished the condition that the person opening a payment account must be an individual with civil legal capacity and civil act capacity; persons aged from 15 to under 18 years old. Additionally, it has abolished the regulation that a joint payment account is a payment account with at least two or more entities jointly named on the account.
• Supplementing regulations on the use of joint payment accounts must comply with the legal provisions on opening and using payment accounts.

Regulations on cashless payment services

Amending regulations on the organization providing payment services through client payment accounts

While Decree 101/2012/ND-CP only regulated that cooperative banks could provide certain payment services after obtaining approval from the State Bank, Clause 2, Article 17 of Decree 52/2024/ND-CP stipulates that cooperative banks can provide certain payment services once these are specified in their establishment and operation licenses issued by the State Bank.

This regulation ensures compliance with the Law on Credit Institutions and sets high requirements for cooperative banks when providing these services.

Amending regulations on the organization providing payment services through client payment accounts

• Decree 52/2024/ND-CP requires that cooperative banks, people’s credit funds, and microfinance institutions must be licensed to provide payment services through client accounts, but only after these services are specified in their establishment and operation licenses issued by the State Bank.
• This decree supplements regulations on payment services not through client payment accounts for enterprises providing public utility services.

Supplementing regulations on providing payment services not through client payment accounts

From Articles 18 to 20, Decree 52/2024/ND-CP has supplemented regulations on payment services not through client payment accounts, including:

This addition aligns with the provisions of the Law on Credit Institutions 2024 and the Law on Investment 2020. It also aims to guide the conditions and procedures for payment service provision activities for enterprises providing public utility services.

Amending and supplementing regulations on intermediary payment service activities

Decree 52/2024/ND-CP has amended and supplemented several regulations regarding the provision of intermediary payment services. Specifically:

Amending the conditions for providing intermediary payment services for non-bank organizations

The new points in this regulation can be compared as follows:

Simplifying administrative procedures for licensing intermediary payment services

• Reducing licensed intermediary payment services: Eliminating one service, which is the e-money transfer support service not within the scope of intermediary payment services;
• Amending, supplementing details, and clarifying the content, procedures, and dossiers for the issuance, revocation, and re-issuance of licenses for the provision of intermediary payment services as a basis for management and implementation;
• Adding principles to serve as a basis for the State Bank to supervise the activities of intermediary payment service providers licensed by the State Bank.

The new regulations on the provision of intermediary payment services aim to meet practical needs and facilitate service providers, enhancing the effectiveness of state management in intermediary payment service activities.

It can be seen that the Government’s issuance of Decree 52/2024/ND-CP on May 15, 2024, regulating cashless payment, ensures transparency, rigor, and legality, addresses practical issues, meets the requirements of digital transformation, and promotes cashless payment in the economy. At the same time, it is synchronized and consistent with the effective date of the Law on Credit Institutions 2024, which was passed by the National Assembly (effective from July 1, 2024). The new regulations on cashless payment in Vietnam 2024 are not only designed to address and resolve existing challenges but also to strongly promote a modern, efficient payment ecosystem, laying a solid foundation for the nation’s digital economic development.

The above is an analysis by Viet An Law regarding Decree 52/2024/ND-CP on cashless payment. If clients have any questions or need legal consultation services, please contact Viet An Law for the best support!