The State Bank of Vietnam is drafting a circular regarding cashless payments which might allow domestic commercial banks and domestic intermediary payment companies to co-operate with foreign intermediary payment companies to provide international payment services.
Under current regulations, domestic banks are only allowed to cooperate with foreign banks and international card organisations for international payments.
There are no regulations for international payments made via foreign e-wallets as well as about international payments that don’t go through payment accounts.
This loophole in the era of Industry 4.0 has seen a rapid boom of international payment methods.
In recent years there has been huge demand for payments via foreign e-wallets such as Wechat Pay and Alipay from Chinese tourists in Vietnam. Vietnam attracts a large number of Chinese tourists every year.
Some banks and intermediary payment companies have asked the central bank to allow them to co-operate with foreign intermediary payment companies to serve international demand while exploiting the large potential of this segment.
Nguyen Hung, General Director of TPBank, said domestic banks could not cooperate with foreign e-wallets like Wechat Pay and Alipay at the moment due to the lack of a legal framework. “We are getting ready to start but must wait for the green light from the central bank,” Hung was quoted by Dau Tu (Investment) online newspaper as saying.
According to Pham Tien Dung, director of the central bank’s Payment Department, the Industry 4.0 revolution had created a number of new international payment models. Previously, international payments were mainly conducted via bank accounts and credit cards, but now e-wallets were emerging, he added.
“It is clear that the definition of international payment must be changed. People should be able to make international payments through their banks and also via intermediary payment methods,” he said. “In a changing world, the management method needs to change,” Dung stressed.
Along with technological advances, cross-border payments are becoming much easier. Cross-border intermediary payment platforms are booming around the world, attracting not only fintech companies but also big corporations such as Amazon, Apple and Google.
Experts predicted there would be a wave of co-operation between banks and domestic fintech companies with foreign e-wallets after the central bank gave the green light, which would also provide support for the tourism and e-commerce industries.
E-wallets are developing rapidly in Vietnam. AppotaPay received a licence from the State Bank of Vietnam in October, making it the 39th intermediary payment company in Vietnam.
The COVID-19 pandemic was also pushing the development of cashless payments among the country’s 97 million population, about 70 percent of whom have access to the internet and 45 percent use smartphones.
Statistics from the central bank showed that as of the end of the first quarter, there were about 13 million activated e-wallet accounts in Vietnam with a total outstanding balance of 1.36 trillion VND (58.62 million USD).
More than 225 million transactions were conducted, worth 77.7 trillion VND, via e-wallets in the first quarter./.