INTERMEDIARY PAYMENT SERVICES AND REGISTERING CONDITIONS AND PROCEDURES ACCORDING TO CURRENT VIETNAMESE LAW
Nowadays, due to the remarkable development of the market economy, it can be seen clearly that payment has been playing a crucial role in the purchasing process. As a result, units and enterprises have updated these general patterns and established several forms of intermediary payment with the purpose of assisting in performing transactions timely and conveniently. In particular, the newsletter hereunder shall analyze the definition of intermediary payment services and operating conditions according to current Vietnamese law.
I. Definition of “intermediary payment services”
Intermediary payment services can be simply understood as a useful tool assisting customers in purchasing without cash.
In the past years, the services hereof have not completely developed and just joined in two categories: electronic paying portal and electronic wallet. Until March 1st, 2015, Circular No. 39/2014/TT-NHNN guiding the intermediary payment services came into force, intermediary payment services have been upgraded leading to several official registered non-bank units in this field. In addition, with high potential, these services shall make the national economy bright in the future.
II. Forms of intermediary payment services
Recently, intermediary payment services are significant contributing factors in human lives due to their convenient and uncomplicated paying procedures. Generally, intermediary payment services are divided into 02 main categories including:
- Service of provision of electronic payment infrastructure
- Support service for payment services
1. Service of provision of electronic payment infrastructure
This form of service is separated into 03 specific auxiliary categories with different roles:
- Financial switch service: providing technical infrastructure to connect, transmit and process electronic data to make payment transactions via ATM, POS, Internet, mobile phone and other electronic transaction channels among providers of payment services and /or among providers of intermediary payment services.
- Electronic clearing service: providing technical infrastructure to receive, compare payment data and calculate the results of receivable and payable amounts of money after clearing among members in order to settle payments to parties involved.
- Electronic payment gateway service: providing technical infrastructure to connect between the payment acceptance units and banks to assist customers to make payments in e-commerce transactions, electronic bill payments and other electronic payments.
2. Support service for payment services
Auxiliary categories of these services include support service of cash collection, wire transfer or electronic wallet. In particular:
- Support service of cash collection and cash payment: assisting banks in cash collection and cash payment services for customers owning payment accounts, bank cards at the banks through the receiving, processing and sending electronic data messages and calculating results of cash collection and cash payment; canceling cash collection and cash payment to make payment to the parties involved.
- Support service for wire transfer: assisting the reception, transmission and processing of data in the electronic money transfer of banks or mandated by banks.
- Digital wallet service: providing customers an identified electronic account created by a services provider, allowing to store a monetary value which is guaranteed by the value of equivalent deposit transferred from the payment accounts of customers at banks and used as a means of non-cash payment.
III. Legal conditions in order to perform payment support services
Non-bank units have to meet the following conditions in order to provide intermediary payment services:
- Having an established license or enterprise registration certificate issued by competent authorities.
- Have the plan for provision of intermediary payment services which must be approved by a competent authority as defined in its Charter and contain, inter alia, the following:
- The process of technical operations of the intermediary payment service for which the application for license is submitted, including: Name and scope of the service, target customers, conditions for using service, diagram and description of steps of the operation, cash flow from the beginning of the service to the finalization of obligations between related parties;
- The mechanism for ensuring the solvency, including: The mechanism for opening and maintaining balance on the payment guarantee account, and purposes of the payment guarantee account;
- The process of internal inspection and control; risk management, security and confidentiality protection; general rules and internal regulations on anti-money laundering; process and procedures for response to trace requests, complaints and denunciations.
3. Charter capital: at least 50 billion Vietnamese dongs.
4. Personnel requirements:
5. Technical requirements:
- There are facilities and technical infrastructure, information technology system and technology solutions that satisfy the requirements for provision of payment intermediary services;
- Back-up technical system is independent from the primary system that ensures the safe and continuous service provision when the primary system has problems;
- In accordance with regulations on safety and security of information technology systems in banking operations.
6. With regard to the financial switching, clearing services: must have the payment between relevant parties settled by another service provider.
7. With regard to payment services provided for a customer holding accounts in multiple banks: must associate with a provider of switching and clearing services licensed by the State Bank to provide such services during the process of intermediary payment services
IV. Issuing license to provide payment intermediary services procedures and required dossiers
1. Preparing for dossiers
The applicant shall send the dossier of application for the License (including 05 sets), by post or directly to the State Banks including:
- The written application for the License according to the form provided by the State bank;
- The Record or the Resolution of the Member assembly meeting, the Board of Directors meeting (or shareholder meeting as prescribed in the Charter of the organization) that pass the scheme for the provision of payment intermediary services;
- The scheme for the provision of payment intermediary services;
- The description of technical solution and the written acceptance of technical experiment with another organization;
- The documents about personnel: the résumés, the authenticated copies of the qualifications proving the capability and proficiency of the legal representative, General Director (Director), Deputy General Director (Deputy Director) and the senior officers that execute the Scheme for the provision of payment intermediary services;
- The License for establishment or Enterprise registration certificate issued by competent State agencies, the Charter of organization and operation (authenticated copy);
2. Issuing procedures
- Based on the dossier of application, the State bank shall examine the dossier according to the conditions in Section III;
- Within 60 days from receiving the complete and valid dossier, the State bank shall appraise and issue the License, or the written refusal to issue the license and specify the reasons;
- The organization that is issued with the License to provide payment intermediary services must pay fees as prescribed by law.
3. License period
The period of the License is 10 years from the day the organization is issued with the License by the State bank.
Above is legal advice of DHT Law Firm about conditions, required dossiers and procedures in order to perform intermediary payment services. If valued clients have any questions or concerns, please liaise us for timely and quality support.