Non-cash payments finally becoming more popular in Vietnam

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A person uses Momo e-wallet services. The State Bank of Vietnam has added regulations to tighten control over e-wallets

According to the draft circular amending and supplementing Circular 39/2014, which guides the use of intermediary payment services, individuals and organizations wishing to open e-wallet accounts must provide sufficient information.

E-wallet service providers, such as MoMo, ZaloPay, AirPay, Moca and Payoo, have to check the information to ensure that the e-wallet accounts are legal.

Dr Bui Quang Tin from the Banking University of HCMC said it is reasonable to ask e-wallet users to provide their personal information to help prevent the use of e-wallets for illegal purposes.

However, e-wallet service providers should help users to complete the administrative procedures to open e-wallet accounts, Tin added.

In addition, e-wallet users must top up their e-wallets through their bank accounts, which may limit the number of e-wallet users as only 30% of the population have bank accounts.

Nevertheless, Nguyen Tri Hieu, a banking expert, said that the connection between e-wallets and bank accounts is necessary to prevent money laundering and corruption.

Meanwhile, an individual must not conduct transactions valued at more than VND20 million per day and VND100 million per month. The respective figures for organizations are VND100 million and VND500 million.

Hieu proposed doubling the transaction value limits stated in the draft circular, adding that e-wallet service providers should invest heavily in technologies to prevent potential losses.

Tin, however, said that the limits are too high as consumers mainly use e-wallets to pay for goods and services at low prices. In addition, regulations on transaction value limits are not as important as those on the security of e-wallets.

The tighter control over e-wallets may make consumers hesitate to make payments through them, which is not in line with the Government’s policies to encourage noncash payments, according to a representative of an e-wallet service firm.

The representative added that regulations allowing individuals to conduct transactions valued at no more than VND20 million per day were unreasonable. If the draft circular is approved, consumers cannot use their e-wallets to make payments for laptops, motorbikes or mobile phones.

Further, the draft circular regulates that e-wallet service providers are banned from offering credit to e-wallet users, paying interest on their balance or any other activities that may increase the balance of e-wallets.

The country currently has 23 types of e-wallets provided by 26 intermediary payment firms. The volume and value of goods and services paid through e-wallets increased 21% and 161% year-on-year, respectively, in the third quarter of last year, according to SBV.

As of 2018, 4.2 million e-wallets had been connected with bank accounts. Payments through e-wallets are becoming increasingly popular, especially in large cities. SGT