On June 21, 2024, the State Bank issued Circular No. 07/2024/TT-NHNN regulating payment agent activities using the Vietnamese dong within the territory of Vietnam ("Circular 07"). The key provisions of Circular 07 are as follows:
1. Individuals are not permitted to act as payment agents for banks
Circular 07 stipulates that only institutions such as commercial banks, cooperative banks, branches of foreign banks, people's credit funds, microfinance institutions, and other qualified organizations may act as payment agents. Additionally, only credit institutions (including commercial banks, cooperative banks, and branches of foreign banks) are authorized to appoint payment agents.
2. Limitations on the scope of activities of payment agents
The Law on Credit Institutions 2017 specifies that payment activities may include various services such as check payments, payment orders, remittances, collection orders, collection mandates, bank cards, credit letters, and other payment services. However, Circular 07 limits the scope of activities of payment agents to only part of the account opening process, issuance of bank cards, and provision of payment services to clients. Specifically, Circular 07 defines the tasks that payment agents are allowed to:
- Receive applications (for opening payment accounts, and issuing bank cards), verify and confirm customer identification information to submit to the appointing party, and guide clients on card and account usage.
- Handle customer transaction documents, transfer transaction information to the appointing party, and handle cash receipts or withdrawals for customers to execute cash deposit/withdrawal transactions, credit card balance payments, etc.
Circular 07 specifies that other organizations acting as agents may only conduct transactions up to a maximum limit of 20 million VND per client per day, within the balance of the payment account, and each payment agent location may transact up to 200 million VND per day and a maximum of 5 billion VND per month.
In essence, payment agents support the appointing party's operations.
3. Responsibilities of banks and agents regarding customer activities related to payment agent operations
- Banks are responsible for customers in cases where the payment agent breaches the payment agent agreement, causing damage to the legal rights and interests of customers. Conversely, agents are jointly responsible for the quality of products and services provided to customers in cases of errors by the payment agent; they are responsible for reimbursing the appointing party for compensatory payments made and compensating customers on behalf of the payment agent for losses arising from breaches of the payment agent agreement, mishandling customer information, operational errors, etc.
- Banks and agents are prohibited from charging additional fees beyond those specified and published by the bank.
- Banks and agents must commit to protecting clients' information.
- Banks must have mechanisms and measures to protect clients, including maintaining the receipt of clients' reconciliation infomation and complaints at payment agent locations, as well as establishing and maintaining a 24/7 hotline to receive and handle clients' inquiries and complaints promptly.
Circular 07 takes effect from July 1, 2024.
Comment: