Circular 07/2024/TT-NHNN on payment agency activities

CIRCULAR

On payment agency activities

Pursuant to the Law on the State Bank of Vietnam dated June 16, 2010;

Pursuant to the Law on Credit Institutions dated January 18, 2024;

Pursuant to the Government’s Decree No. 102/2022/ND-CP dated December 12,2022, defining functions, tasks, powers and organizational structure of State Bank of Vietnam;

Pursuant to the Government’s Decree No. 52/2024/ND-CP dated May 15, 2024, on non-cash payment;

At the proposal of the Director of the Payment Department;

The Governor of the State Bank of Vietnam hereby promulgates a Circular on payment agency activities.

Chapter I

GENERAL PROVISIONS

Article 1. Scope of regulation

This Circular provides the activities of payment agents in Vietnamese dong in the territory of Vietnam.

Article 2. Subjects of application

1. Commercial banks.

2. Cooperative banks.

3. Foreign branch banks.

4. People’s credit funds.

5. Microfinance institutions.

6. Institutions, other than credit institutions or foreign bank branches, related to payment agency activities (hereinafter referred to as other institutions).

Article 3. Interpretation of terms

In this Circular, the terms below are construed as follows:

1. Payment agency activities mean a payment Principal authorizes a payment agent to carry out part of the process of opening payment accounts, issuing bank cards, and providing payment services to clients.

2. The payment principal includes: commercial banks, cooperative banks, foreign bank branches (hereinafter referred to as the Principal).

3. The payment agent includes: commercial bank, cooperative bank, foreign bank branch, people's credit fund, microfinance institution, other institution (hereinafter referred to as the Agent).

4. Payment agency point means the place where the payment activities of the Agent are conducted.

Payment agency point of other institutions must be the business location of the Agent or its branch.

5. Payment agency contract means an agreement between the Principal and the Agent on the implementation of part of the process of opening payment accounts, issuing bank cards and providing payment services to clients.

6. Payment agency fee means the amount payable by the Principal to the Agent for performing the delegated payment activities, as agreed upon by both parties and in accordance with legal regulations.

Chapter II

PAYMENT AGENCY ACTIVITIES

Article 4. Payment agency activities

The Principal authorizes the Agent to perform one or more of the following tasks:

1. Receiving payment account opening applications, checking and verifying client identification information to send to the Principal, and guiding clients in using their payment accounts.

2. Receiving bank card issuance applications, checking and verifying client identification information to send to the Principal, and guiding clients in using the bank cards.

3. Receiving clients' requests for payment service, preparing, signing, controlling, processing transaction documents, forwarding client transaction information to the Principal, receiving cash from or disbursing cash to clients to execute the following transactions:

a) Depositing/withdrawing cash to/from the client's payment account opened at the Principal;

b) Depositing/withdrawing cash to/from the client's debit cards, prepaid cards with identification issued by the Principal;

c) Depositing cash to pay the outstanding balance of the client's credit card issued by the Principal;

d) Performing payment services such as payment order, payment authorization, collection, collection authorization, money transfer, collection and payment on behalf.

4. Within 1 working day from the time of receiving the client's request for payment services, the Agent shall process the client's transaction documents and transfer the client’s transaction information to the Principal, except for the cases of system information incidents and/or other force majeure conditions preventing the execution of client transactions.

Article 5. Transaction limits

1.The principal must take measures to manage balances and transaction limits for other institutional agents, including:

a) The maximum transaction limit (including cash deposits and withdrawals) for individual clients is up to VND 20 million per client per day.

b) The Agent may only conduct transactions for clients within the scope of the payment account balance opened at the Principal to execute assigned transactions, as stipulated in Clause 4 Article 7 of this Circular. Each payment agency point shall transact no more than VND 200 million per day and a maximum of VND5 billion per month.

2. Transaction limits for the Agent being commercial bank, cooperative bank, foreign bank branch, people's credit fund, or microfinance institutions shall comply with an agreement between the Principal and the Agent.

‎‎          Article 6. The activities of the Principal and the Agent

1. The implementation of agency activities, acting as an agent for commercial banks, cooperative banks, foreign bank branches, people's credit funds, and microfinance institutions, must comply with the Establishment License or Decision on organization and operations issued by the competent authority, and any amendments or supplements to the License or Decision (if any).

2. People's credit funds may act as agents for cooperative banks, serving their members and clients.

3. Microfinance institutions may act as agents, for banks, serving their clients.

4. Other institutions established legally as enterprises may act as agents based on agreements with the Principal.

5. Commercial banks, cooperative banks, foreign bank branches, and microfinance institutions may act as agents for multiple Principals. Other institutions are only permitted to act as agents for one Principal.

Article 7. Principles of implementing payment agency activities

1. Payment agency activities must be formalized into a written contract between the Principal and the Agent in accordance with this Circular and other relevant laws.

2. The Principal may assign the Agent to conduct the transactions as specified in Article 4 of this Circular in accordance with the Establishment License or Decision on organization and operations issued by the competent authority, and any amendments or supplements to the License or Decision (if any) of the Principal, the Agent being a credit institution or a foreign bank branch.

3. The Agent is not allowed to hand over agent activities to a third party.

4. When performing the operations specified in Clause 3, Article 4 of this Circular, Agents being other institutions must open and maintain a payment account at the Principal to conduct assigned operations within the balance as agreed upon between the Principal and the Agent. This payment account must be separate from other payment accounts opened at the Principal for other Agent’s activities and purposes.

5. The Principal shall collect fees from the client through the Agent at the rate set by the Principal from in each period. Neither the Principal nor the Agent is permitted to collect additional fees beyond the fee tariff prescribed and announced by the Principal. The Agent's fee tariff must clearly state the fees and rates applicable to each type of service, in accordance with the law provisions, and shall be publicly displayed at the payment agency points and on the Agent's website (if any).

6. The Principal and the Agent must commit to ensuring client information confidentiality in accordance with the Law on Credit Institutions, its implementing guidelines, and relevant laws.

7. The Principal is allowed to enter into a payment agency contract with another institution nationwide. The number of payment agency points of other institutions in the district-level areas (excluding districts, towns, provincial cities, and centrally-run cities) within provinces and centrally-run cities must account for more than 70% of the total number of payment agency points of the Principal.

8. The number of payment agents being credit institutions, foreign bank branches shall be decided by the Principal itself within its managerial capability; the number of payment agency points of credit institutions and foreign bank branches shall be decided by themselves based on their operational network.

Article 8. The contents specified in the payment agency contract

1. The payment agency contract must contain at least the following contents:

a) Name and address of the Principal, legal representative or authorized representative of the Principal;

b) Name and address of the Agent, legal representative or authorized representative of the Agent;

c) Scope of agency activities, including the assigned activities and limits applicable to clients and the Agent;

d) Duration of contract;

dd) Daily transaction time and working hours;

e) Payment agency fee;

g) Number of agent points or list of agent points;

h) Rights and obligations of the Principal and the Agent;

i) Dispute resolution methods;

k) Termination of contract.

2. In addition to the details specified in Clause 1 of this Article, the parties may agree on other contents in the payment agency contract in accordance with this Circular and other relevant laws.

Article 9. Rights and obligations of the Principal

1. The Principal has the following rights:

a) Selecting partners for cooperation and signing the payment agency contract;

b) Stipulating and applying criteria to select the Agent;

c) Agreeing with the Agent on the scope of agency activities and payment agency fees;

d) Requesting the Agent to report, provide documents, information on the situation, and results of implementing the payment agency contract;

dd) Requesting the Agent to pay legitimate benefits (if any) arising from the implementation of the payment agency contract;

e) Checking and supervising the implementation of the payment agency contract by the Agent;

g) Having the right to terminate the payment agency contract if the agent violates the contract;

h) Other rights as stipulated in the payment agency contract, in accordance with legal regulations.

2. The Principal has the following obligations:

a) Managing, supervising, and being fully responsible for payment agency activities performed by the Agent;

b) Disclosing a list of contracted Agents (including payment agency points) publicly on website and application of the Principal;

c) Promulgating guiding documents and training the Agent on payment agency activities to ensure compliance with the law on payment service provision activities, regularly updating in accordance with relevant laws and operational practices to ensure safety in the implementation process; guiding the Agent to publicly notify the activities assigned at its head office, operational network;

d) Guiding the Agent to identify clients, verify, update client information according to the procedures being carried out by the Principal; taking responsibility for the accuracy of identifying, verifying client information by the Agent and compliance with the regulations on client identification in the Law on Anti-Money Laundering;

dd) Assessing risks to determine transaction scope, transaction limits for client’s payment accounts identified, verified by the Agent;

e) Agreeing with the Agent on the construction, establishment of information technology infrastructure to ensure smooth transaction processing and supervision of the Agent;

g) Being responsible for the security, safety, information security of information systems, protecting client rights, protecting client information, personal data, and taking measures to prevent money laundering, terrorist financing, and proliferation of weapons of mass destruction;

h) Managing balances, transaction limits of Agents being other institutions according to Clause 1 Article 5 of this Circular;

i) Being responsible to clients in case the Agent violates the payment agent contract, causing damage to the legal rights and interests of clients;

k) Having mechanisms, measures to protect clients, including maintaining receipt of reconciliation information, complaints from clients at payment agency points; simultaneously establishing, maintaining a continuous 24/7 hotline to receive, promptly address client information and complaints;

l) Collecting, cross-checking, and storing all transaction data, documents arising from the Agent according to the provisions of relevant laws;

m) Paying payment agency fees to the Agent according to the provisions of the contract;

n) Developing and promulgating internal regulations on payment agency activities, including the cash delivery and storage process to ensure operational safety;

o) Fulfilling other obligations as stipulated in the contract, complying with legal regulations.

‎‎          Article 10. Rights and obligations of the Agent

1. The Agent has the following rights:

a) Refusing requests from the Principal that are not stipulated in the payment agency contract or are not in accordance with legal regulations;

b) Requesting the Principal to guide and provide necessary information, and documents related to the content of payment agency activities;

c) Receiving payment agency fees and other lawful benefits (if any) as stipulated in the payment agency contract;

d) Other rights as stipulated in the payment agency contract, in accordance with legal regulations.

2. The Agent has the following obligations:

a) Performing the assigned agency activities exactly as stipulated in Article 4 of this Circular and the payment agency contract;

b) Promptly and fully notifying the Principal of the implementation of payment agency activities as prescribed in the contract;

c) Paying the Principal any legal benefits (if any) arising from the execution of the payment agency activities as stipulated in the payment agency contract;

d) Being subject to the inspection and supervision of the Principal regarding the implementation of the payment agency activities;

dd) Complying with the law on the protection of information and personal data of clients, taking responsibility for the accuracy of identification and verification of client information and taking measures to prevent money laundering, terrorist financing and proliferation financing of weapons of mass destruction in the process of being Agent;

e) Being jointly responsible for the quality of products and services provided to clients for case of Agent's fault; reimbursing the Principal the compensation that the Principal has paid, compensated to clients on behalf of the Agent for the losses or damages arising from the Agent's breach of the payment agency contract and the Agent's fault in leaking client information or handling errors and mistakes during operations;

g) In the process of acting as an Agent, the Agent must monitor and manage the money and assets of the Principal (if any) in accordance with the law, not to use the money and assets of the Principal for other business purposes;

h) Receiving client’s inquiries, complaints and coordinating with the Principal to handle the inspection and complaint; the deadline for processing clients' inquiries and complaints, as well as the results thereof, shall comply with regulations on the provision of non-cash payment services;

i) Developing internal processes to manage risks for each specific agency activity, including cash delivery and storage processes; having facilities, networks and qualified, professional and technical staff to ensure the implementation of payment agent activities or at the request of the Principal;

k) Notifying the Principal for case of suspension of transactions with clients or suspension of service for more than 4 hours during the daily transaction period, clearly stating the reasons and handling plans to ensure uninterrupted payment agent activities;

l) Storing and ensuring the integrity of data, records and documents and providing them to the Principal upon request;

m) Fulfilling other obligations as prescribed in the payment agency contract, in accordance with the provisions of law.

Chapter III

REPORTING AND ORGANIZING THE IMPLEMENTATION

‎‎ Article 11. Responsibility for reporting and providing information

1. At least 30 days before implementing the payment agency activities, the Principal must send a written notice to the State Bank of Vietnam (Payment Department), the State Bank branch of the province or centrally-run city in the area where Principal is headquartered as well as to the areas where the payment agency points are located and post on its website information about the Agent, cooperation methods, agency scope, agency duration, and management procedures for payment agency points.

2. On a quarterly basis, the Principal must send a report on the situation of the payment agency activities according to the Appendix issued together with this Circular to the State Bank of Vietnam (Payment Department) for monitoring.

3. When stopping the payment agency activities with an Agent, within 05 working days, the Principal must send a written notice to the State Bank of Vietnam (Payment Department), the State Bank branch of the province or centrally-run city in the area where Principal is headquartered as well as to the areas where the payment agent points stop operating to monitor, supervise and post information on its website.

4. By the 10^th of each month, the Principal must send a report on the list of Agents and payment agency points showing signs of fraud or counterfeiting under the guidance of the State Bank of Vietnam.

‎‎          Article 12. Responsibilities of units under the State Bank of Vietnam

1. The Payment Department

a) Monitoring the implementation and advising the Governor of the State Bank of Vietnam to process problems during the implementation of this Circular.

b) Acting as a focal point for receiving and monitoring reports and notices of the Principal as prescribed in Article 11 of this Circular.

c) Acting as a focal point to coordinate with relevant units to develop tools and software to monitor payment agency activities.

d) Acting as a focal point to coordinate with the Banking Supervision Agency, and State Bank branches of provinces and centrally-run cities for checking the Principal and the Agent in compliance with the provisions of this Circular.

dd) Coordinating with the Banking Supervision Agency to inspect the compliance with the provisions of this Circular.

2. The Banking Supervision Agency; State Bank branches of provinces and centrally-run cities

a) Acting as the focal point for receiving, appraising, and submitting to the competent authority the application dossiers for the issuance, renewal, or addition of payment agency activities and/or payment service agency activities to the operating licenses of commercial banks, cooperative banks, foreign bank branches, people's credit funds, and microfinance institutions according to the authority and regulations of the State Bank of Vietnam on the issuance of establishment and operation licenses for credit institutions and foreign bank branches.

b) Conducting inspections of the Principal and the Agent, and supervising the Principal's compliance with the provisions of this Circular, handling violations within their authority, and notifying the Payment Department and relevant units of the results.

Chapter IV

IMPLEMENTATION PROVISIONS

Article 13. Effect

This Circular takes effect on July 01, 2024.

Article 14. Organizing implementation

The Chief of Office, the Director of the Payment Department, the heads of relevant units under the State Bank of Vietnam, credit institutions, foreign bank branches and other relevant institutions are responsible for the implementation of this Circular./.

For the Governor

The Deputy Governor

PHAM TIEN DUNG