On January 9, 2023, in Hanoi, the State Bank of Vietnam (SBV) organized a Thematic Conference on ‘Payment Operations at Intermediary Payment Service Providers’ under the chair of SBV Deputy Governor Pham Tien Dzung.
SBV Deputy Governor Pham Tien Dzung speaks at the Conference
Intermediary payment service providers have been growing rapidly after the pilot phase
In his opening speech at the Conference, Deputy Governor Pham Tien Dzung emphasized from the original 8 intermediary payment service providers that were licensed by the SBV in the 2008-2010 period, now the number has increased to 51 providers, with 7 to 8 billion transactions processed per year. The operations of the licensed intermediary payment service providers have promoted their role as a bridge to enable the credit institutions to process payment transactions faster, serving more customers and market segments.
Intermediary payment service providers have made significant contributions to the socio-economic development. In particular, apart from their support to the commercial banks, intermediary payment service providers have also supported very effectively the payment transactions for public services in Hanoi and Ho Chi Minh City. This is a typical example of the increasingly significant role of intermediary payment service providers in the administrative activities.
According to Deputy Governor Pham Tien Dzung, in spite of the encouraging results over the past time, there are still limitations that need to be addressed in the coming time. Therefore, this Conference had been organized to assess the results achieved over the past time, as well as to recognize all subjective and objective limitations, and the challenges in ensuring the security and safety of intermediary payment services. Beside that, the Conference was also an opportunity for the SBV to inform the intermediary payment service providers about the orientations for the SBV’s management of the intermediary payment services in the coming time.
Mr. Pham Anh Tuan, Director General of the Payment Department, speaks at the Conference
Reporting on the results of the payment operations and the security and safety in the provision of intermediary payment services, Mr. Pham Anh Tuan, Director General of the Payment Department, said that currently, most of the intermediary payment service providers have provided a full range of basic services, such as e-wallets, cash-in and cash-out, etc., of which the growth of e-wallets has been highly remarkable. In 2023, the total number of transactions recorded was estimated at approximately 4.09 billion, with the total value of about VND 1,900 trillion, up by 47.15% in the number of transactions, and 41.78% in the transaction value as compared to the figures of 2022. On average, an active e-wallet generates 10 transactions per month, with the value of approximately VND 4.8 million per month.
The participants at the Conference
Solutions to promote safe and sound operations of intermediary payment service providers
To overcome the limitations and protect the legitimate rights of customers, according to the Director General of the SBV Payment Department, there are a number of solutions for the healthy development of intermediary payment service providers in full compliance with the laws.
From the SBV side, right from the beginning of 2024, the SBV needs to issue new Circulars to replace Circular No. 39/2016/TT-NHNN, Circular No.20/2022/TT-NHNN and Circular No.46/2014/TT-NHNN, in an effort to improve the legal corridor for intermediary payment services.
The SBV would also strengthen the supervision, inspection and the handling of violations; coordinate with the Department of Economic Security (A04), the Department of Cyber Security and High-Tech Crime Prevention (A05) to inspect the eKYC solutions at those providers; enhance the coordination with the relevant Ministries and agencies in preventing and combating crimes related to payment operations, as well as preventing any misuse of the payment services and intermediary payment services for illegal transactions, etc.
Mr. Tuan also added that in the coming time, the SBV would deploy a software of "Management information system in support of the management, supervision and prevention of fraud risks in payment operations" (SIMO system) to gradually develop a centralized database of payment accounts and e-wallets that are suspicious or related to fraudulent/illegal transactions; finalize at an early stage and promote the exploitation of the "Online Data Collection System" (ODCS) to connect, collect and monitor the balances of the payment guarantee accounts of the intermediary payment service providers, which are opened at the payment service providers.
In his concluding remarks at the Conference, Deputy Governor Pham Tien Dzung emphasized that intermediary payment service providers play a significant role in the payment market. In light of the strong development of the digital technology, in order to promote the development of electronic payments in general and the provision of intermediary payment services in particular, as well as to enhance the effectiveness of crime prevention and ensuring the security and safety of the intermediary payment services, the SBV Deputy Governor requested the relevant entities to strongly focus on implementing the established tasks and solutions, including the following:
The SBV entities need to provide their support to intermediary payment service providers to address any existing limitations and obstacles, especially related to the mechanisms and policies; enhance the inspection and supervision of the intermediary payment services; making public notifications and strictly penalize any violations of intermediary payment service providers.
For their part, intermediary payment service providers need to develop their own plans for the implementation and correction of any shortcomings detected, warned and recommended, focusing on the internal control, improving the management capacity, determining effective operating directions in accordance with the applicable laws, etc.
Le Hang