On May 15, 2024, the Government has just established Decree No. 52/2024/ND-CP regulating non-cssh payments (effective from July 1, 2024) (“Decree 52”), replacing Decree No. 101/2012/ND-CP (amended and supplemented). Decree 52 is an important legal document regulating non-cash payment activities, including the opening and use of payment accounts; non-cash payment services; payment intermediary services; organization, management, and supervision of payment systems. In this article, TNTP lawyer will analyze the highlight of Decree No. 52/2024.
1. Highlights of Decree 52
(i) Supplementing regulations on electronic money;
(ii) Supplementing regulations on international payment;
(iii) Supplementing cases of non-cash payment accounts freeze;
(iv) Supplementing many prohibited acts in non-cash payment.
Details of each highlight are outlined below.
2. Supplementing regulations on electronic money
• According to Clause 12, Article 3, Decree 52 on Interpretation of terms, 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.
• According to Clause 1, Article 6, Decree 52 on E-wallets and prepaid cards, E-wallets and prepaid cards are means of e-money storage.
• Electronic money suppliers include the State Bank of Vietnam (hereinafter referred to as SBV), banks, foreign bank branches, people’s credit funds, microfinance organizations, and public postal service providers.
Decree 52 has clearer regulations on electronic money, e-wallets, and subjects allowed to provide electronic money. When opening bank accounts at credit institutions, they can carry out procedures to link with the e-wallet service provided by the credit institution. Thus, people will be prevented from linking illegal payment methods by unlicensed organizations.
3. Supplementing regulations on international payment
• Clause 8, Article 3 of Decree 52 has supplemented regulations to clarify the definition of international payment and international payment system. Specifically: International payment refers to payment transactions implemented for an organization or individual with a payment account or payment instrument outside of Vietnam’s territory.
• Article 5 of Decree 52 regulates Foreign currency payment and international payment (i.e. service provision activities from abroad to Vietnam and from Vietnam to abroad), specifically:
(i) Foreign currency payment and international payment shall comply with this Decree, foreign exchange management, users’ data protection, cybersecurity, and tax administration laws, anti-money laundering, terrorism financing, and financing of proliferation of weapons of mass destruction laws, and international treaties and agreements that Vietnam is a signatory. The application of commercial practices shall comply with Article 3 of the Law on Credit Institutions.
(ii) Commercial banks and foreign bank branches may participate in international payment systems when they meet the requirements prescribed in Article 21 of Decree 52.
(iii) The provision of payment services and payment intermediary services for clients not residing in Vietnam and foreigners residing in Vietnam to implement payment transactions of goods and services in Vietnam of foreign service providers shall be carried out through commercial banks or foreign bank branches approved by SBV to participate in international payment systems of such foreign service providers.
(iv) Financial switch service providers may connect to international payment systems to carry out international financial switch services when they meet the requirements prescribed in Article 22 of Decree 52.
(v) Payment intermediary service providers (excluding financial switch service providers) may provide their services for clients for the implementation of payment transactions of foreign goods and services; the payment and settlement of such international transactions shall be carried out through commercial banks or foreign bank branches approved by SBV to engage in foreign exchange on international markets.
(vi) Parties involved in international payment shall adequately, accurately, and promptly provide information and meet the requirements of state management authorities according to Vietnamese law.
Regulations in Article 5 of Decree 52 show that state management agencies are increasingly enhancing the role of domestic credit institutions and promoting cooperation with foreign credit institutions to support people in making international payments more conveniently.
4. Supplementing cases of cashless payment accounts freeze
According to Article 11 Decree 52, Payment accounts shall have their balances partly or wholly frozen in the following cases:
(i) When there are prior agreements between owners of payment accounts and payment service providers or requests from owners of payment accounts.
(ii) When there are decisions or written requests from competent authorities as prescribed by the law.
(iii) When payment service providers detect mistakes or errors when taking credit notes 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 taking credit notes into payment accounts of clients. The frozen amount on a payment account shall not exceed the mistaken or erroneous amount.
(iv) When there are requests to freeze the account from one of the owners of a general payment account, excluding cases where there are prior written agreements between the payment service provider and the owners of such a general payment account.
5. Supplementing various prohibited acts in cashless payment
Compared with Decree No. 101/2012/ND-CP and Decree 80/2016/ND-CP, Article 8 of Decree 52 has supplemented many prohibited acts in cashless payments, specifically:
(i) Providing payment intermediary services without licenses to provide payment intermediary services issued by SBV. Providing payment services without being payment service providers.
(ii) 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.
(iii) Erasing and altering contents of licenses to provide payment intermediary services and purchasing, selling, transferring, leasing, lending, and forging such licenses.
(iv) Authorizing or assigning other organizations or individuals to carry out licensed operations of agents according to licenses to provide payment intermediary services.
(v) Falsifying or forging documents proving eligibility for the issuance of licenses to provide payment intermediary services in applications for licenses.
(vi) Operating contrary to contents prescribed in licenses to provide payment intermediary services.
(vii) 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.
In the context of increasingly developing technology and information technology along with the trend of international integration, Decree 52 was issued as a solution to solve problems with cashless payments, ensuring people can secure payments and prevent violations of the law in the field of electronic money.
This is an article by TNTP lawyer on the topic: “What are the highlights of Decree no. 52/2024/NĐ-CP”. Hopefully this article will bring value to our readers.
Best Regard.
