On 15 May 2024, a new Decree on non-cash payments has been passed by the Government (Decree 52/2024) to replace the old Decree 101/ND-CP of the Government on non-cash payment dated 22 November 2012 (Decree 101/2012) from 1 July 2024. In this post, we will introduce certain key changes of Decree 52/2024.

Supplementing e-wallets as one of the permitted non-cash payment instruments

Decree 52/2024 provides a specific definition of non-cash payment instruments which are instruments issued by organizations providing payment services, finance companies authorized to issue credit cards, intermediary payment service providers offering electronic wallet services, and used by customers to conduct payment transactions. Furthermore, e-wallets are supplemented as one of the non-cash payment instruments.

Banks, foreign bank branches or intermediary payment service providers may provide E-wallets service. Due to the increase in illegal payments via e-wallets (such as online gambling, or scamming), Decree 52/2024 only allows customers to use e-wallets linked to his or her own payment account or debit card. This regulation may prevent people from renting or lending their identities and documents to alleged violators for opening bank accounts or e-wallets.

New definition of E-money

Decree 52/2024 introduces a new definition of E-money (Tiền điện tử) which

- is the value of Vietnamese Dong;

- is stored on electronic instruments (i.e. e-wallets and prepaid cards);

- is equal to the money amounts prepaid by customers to banks, foreign bank branches or intermediary payment service providers offering electronic wallet services.

Stricter requirements for payments in foreign currency and international payments

Decree 52/2024 newly provides specific conditions for banks and or foreign bank branches in participating international payment systems.

Regarding the sale of goods or service provision transactions in Vietnam conducted by non-residents and foreign residents in Vietnam, foreign organizations must not directly provide payment services and/or intermediary payment services for those transactions unless via banks or foreign bank branches permitted to participate to the international payment systems of that foreign organizations.

Regarding the offshore sale of goods or service provision transactions, intermediary payment service providers may provide intermediary payment services (except for financial switching services) for such transactions but the payment and settlement for such transactions must be carried out through commercial banks or foreign bank branches permitted to conduct foreign exchange activities in the international market.

New prohibitions 

Compared to Decree 101/2012, Decree 52/2024 has a broader scope of prohibitions in relation to non-cash payment.  For instance,

Due to increasing online crimes, the Government strictly prohibits buying, selling, renting, leasing, borrowing, or lending payment accounts and e-wallets; renting, leasing, buying, selling, or opening bank cards on behalf of others (except for anonymous prepaid cards); stealing, buying, or selling payment account information, bank card information, and e-wallet information. 

To prevent payments for crimes, the performance of using payment accounts, payment instruments, payment services, and intermediary payment services for gambling fraud, deception, and illegal activities is prohibited. 

Decree 52/2024 also prohibits illegal disclosure of information about the balance of payment accounts, bank card balances, e-wallet balances, and payment transactions of customers at payment service providers and intermediary payment service providers.

New rights of payment service providers to payment accounts

Decree 52/2024 supplements the rights of payment service providers which may refuse payment orders if there is a legal basis to determine that the account holder has violated the prohibited acts, and may freeze payment accounts if there is a mistake or error in crediting the customer's payment account or acts upon a request for refund by the transferring payment service provider due to mistakes or errors compared to the payment order of the transferor after crediting the customer's payment account.

Stricter conditions on intermediary payment service provision

Decree 52/2024 provides stricter conditions to obtain intermediary payment service provision licenses, including:

must not be in the process of division, separation, consolidation, merger, conversion, dissolution, or bankruptcy, and in case of providing financial switching services or electronic clearing services, must not engage in any other business activities;

must have a minimum paid-up charter capital or allocated capital of (1) 50 billion VND for e-wallet services, collection and payment support services; or (2) 300 billion VND for financial switching services, international financial switching services, and electronic clearing services;

must have legal representative or general director (director) with specific qualifications;

must have a Technical Solution Explanation Document for the provision of intermediary payment services meeting the requirements for level 3 information system security approved by competent bodies under its Articles; and

other specific conditions for each of intermediary payment services.

Transitional provisions

Decree 52/2024 provides for certain transitional provisions as follows:

Banks and foreign bank branches that have participated in international payment systems before 1 July 2024 (i.e. the effective date of Decree 52/2024) may continue to participate in those international payment systems but they need to obtain a license to participate in international payment systems within 24 months from 1 July 2024. Otherwise they must cease participation in international payment systems not listed in the license.

Organizations licensed to provide financial switching services before 1 July 2024 and connected to international payment systems may continue to connect to those international payment systems but they need to obtain a license to provide international financial switching services within 24 months from 1 July 2024. Otherwise they must cease connection to international payment systems not listed in the license.

Organizations licensed to provide intermediary payment services before 1 July 2024 may continue to operate according to their license until it expires.

Written by Cao Khanh Linh and edited by Hoang Thi Thanh Thuy.