The government has just promulgated Decree No. 52/2024/ND-CP providing for cashless payments (effective from July 1, 2024), replacing Decree No. 101/2012/ND-CP. Decree 52 is an important legislative document on cashless payment, affecting many sectors and entities. It contributes to perfecting a basic and solid legal framework for cashless payment activities, promoting cashless payments, facilitating the digital transformation of the banking sector, and developing new, convenient, and safe payment products and services.
Decree 52 has introduced several notable new provisions, specifically:
1. Official Addition of Provisions on Electronic Money (E-money):
Decree 52 has officially incorporated provisions for electronic money, defining and clarifying the nature of electronic money as follows:
"Electronic money refers to the value of Vietnam Dong stored in electronic means provided based on the amount prepaid by clients to banks, foreign bank branches, and e-wallet payment intermediary service providers." (Article 3).
Forms of electronic money used in payment activities include e-wallets and prepaid cards. Entities providing electronic money include banks, foreign bank branches, and payment intermediary service providers (providing e-wallet services linked to customers' payment accounts at banks) (Article 6).
The completion of legal provisions for electronic money will contribute to preventing and eliminating illegal payment instruments issued by unauthorized organizations and support competent authorities in preventing and combating violations of law in the field of electronic money.
2. Amendments and Supplements to Provisions for Opening and Using Payment Accounts:
Decree 52 has amended and supplemented several provisions to better align with practicalities, such as provisions for opening and using payment accounts; authorization for the use of payment accounts; freezing of payment accounts; post-freeze handling; cases for closing payment accounts; and handling balances when closing payment accounts. Specifically:
Firstly, the provision on “Temporary Lock” of payment accounts (temporary halt of transactions) has been removed.
Secondly, the scope for “Freezing Accounts” has been expanded to include prior agreements between the account holder and the payment service provider or at the request of the account holder.
Thirdly, it clarifies the cases for “Freezing Accounts” in case of errors or mistakes, specifically: “When payment service providers detect mistakes or errors when writing “Yes” into payment accounts of clients or carry out refund orders of money transfer service providers due to mistakes and errors compared to payment orders of transferring parties after writing “Yes” into payment accounts of clients. The frozen amount on a payment account shall not exceed the mistaken or erroneous amount;” -> It's not possible to mistakenly transfer money and then go to the bank to immediately request that the recipient's account be frozen.
3. Addition of New Prohibited Acts in Cashless Payments (Article 8):
Decree 52 has expanded the scope of prohibited acts in cashless payments to include:
Purchasing, selling, hiring, leasing, borrowing, and lending payment accounts or e-wallets; hiring, leasing, purchasing, and selling bank cards or opening bank cards on behalf of others (excluding cases of anonymous prepaid cards); stealing or colluding with others to steal, purchase, or sell information on payment accounts, bank cards, or e-wallets.
An owner of a payment account at a specific payment service provider that provides information for or commits to not having a payment account at another provider of payment services for parties with relevant rights and obligations according to the law on the disbursement of loans of credit institutions and foreign bank branches.
Issuing, providing, and using illegal payment instruments.
Performing, organizing, or enabling the following acts: using or taking advantage of payment accounts, payment instruments, payment services, or payment intermediary services to commit gambling, organize gambling, rig, deceive, and commit illegal trading and other illegal acts.
Providing payment intermediary services without licenses to provide payment intermediary services issued by SBV. Providing payment services without being payment service providers. Authorizing or assigning other organizations or individuals to carry out licensed operations of agents according to licenses to provide payment intermediary services.
Falsifying or forging documents proving eligibility for the issuance of licenses to provide payment intermediary services in applications for licenses. Operating contrary to contents prescribed in licenses to provide payment intermediary services.
4. Addition of Sanctions in Case of Violating Prohibited Acts under Article 8:
Firstly, "Refusal to Carry Out Payment Orders": Payment service providers may refuse to carry out the payment orders of owners of payment accounts in cases where there are legal grounds to determine that the owners have committed prohibited acts prescribed in Article 8 (previously, they could only refuse if the payment order was invalid or there were insufficient funds).
Secondly, "Account Closure": Owners of payment accounts commit prohibited acts concerning payment accounts prescribed in Clause 5 and Clause 8, Article 8, specifically:
“Clause 5: Opening or maintaining anonymous or impersonating payment accounts or e-wallets; purchasing, selling, hiring, leasing, borrowing, and lending payment accounts or e-wallets; hiring, leasing, purchasing, and selling bank cards or opening bank cards on behalf of others (excluding cases of anonymous prepaid cards); stealing or colluding with others to steal, purchase, or sell information on payment accounts, bank cards, or e-wallets… Clause 8: Performing, organizing, or enabling the following acts: using or taking advantage of payment accounts, payment instruments, payment services, or payment intermediary services to commit gambling, organize gambling, rig, deceive, and commit illegal trading and other illegal acts.”
5. Addition of Provisions for “International Payments”:
Decree 52 has added provisions to clarify the concept of international payments, international payment systems (Article 3); state management responsibilities of SBV regarding international payments (Article 4); provisions for the provision of services from abroad into Vietnam and from Vietnam abroad, carry out international financial switch services (Article 5); provisions for the approval for participation in international payment systems by commercial banks and foreign bank branches and the conditions for such approval (Articles 5 and 21); provisions for the responsibility of relevant parties to provide adequate and prompt information and meet the requirements of state management authorities according to Vietnamese law to manage cross-border transactions (Article 5).
The new provisions have contributed to enhancing the management role of state management authorities in international payment activities and promoting models of cross-border payment service cooperation in the context of technological development, innovation, and the increasing support for payments in e-commerce.
6. Amendments and Supplements to Provisions for the Provision of Payment Intermediary Services (PIS):
Decree 52 has amended and supplemented several provisions for the provision of PIS to better align with practical needs as well as facilitate service providers, improving the role of state management in the provision of PIS.
Specifically: (i) eliminating one PIS that does not require a license (removing "electronic money transfer support services" from the scope of PIS); (ii) reducing administrative procedures and reviewing business conditions; (iii) amending, detailing, and clarifying the content, processes, procedures, documentation for issuing, revoking, and reissuing licenses as a basis for management and organizational implementation; (iv) adding principles as a basis for the SBV to supervise the provision of PIS by licensed PIS providers.
The SBV is also urgently completing draft circulars to guide the implementation of Decree 52, creating a consistent and solid legal framework to promote cashless payments while ensuring security, safety, and the protection of users' rights.
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