Models with specific legal regulations
Models without legal regulations
The predominant fintech business models among both new and legacy players are divided into two groups: models with a legal basis and models without. This article is part of a series on fintech in Vietnam.(1)
Models with specific legal regulations
The State Bank of Vietnam (SBV) has revised the current legislation to support credit institutions and banks that apply new technologies during their operation, including guidance in cashless payment, intermediary services in several articles of Circular 39/2014/TT-NHNN (amended and supplemented by Circular 23/2019/TT-NHNN), and the adoption of the remote verification process – namely, electronic know-your-customer – newly recorded in Circular 16/2020/TT-NHNN.
Regarding insurance technology, the legal framework has not yet been developed. However, for the first time, insurance enterprises can now grant electronic certificates of compulsory insurance for civil liability of motor vehicle owners according to Decree 03/2021/ND-CP.
Among these, mobile money is the most developed model. It has been in the spotlight since the prime minister approved a pilot – according to Decision 316/QD-TTG – to implement mobile money, so marking a bold step for the development of payments using telecoms accounts in Vietnam. Currently, three major Vietnam telecoms providers are eligible for permission to participate in the pilot: Viettel, VNPT and Mobifone.
Models without legal regulations
The activities of peer-to-peer (P2P) lending, such as open application program interfaces, crowdfunding, blockchain, digital banking and mobile payment solutions (eg, Samsung Pay), are currently not governed by specific regulations in the Vietnamese legal system. However, these fintech models are still applied in practice, provided they do not contravene general law. (For instance, fintech companies operating P2P lending or blockchain platforms are only obliged to obtain an enterprise registration certificate.) The SBV is carrying out research to develop a legal framework to regulate these models.
For further information on this topic please contact Net Le or Thanh Minh Vu at LNT & Partners by telephone (+84 28 3821 2357) or email ([email protected] or [email protected]). The LNT & Partners website can be accessed at www.lntpartners.com.
Endnotes
(1) For the first article in the series, please see "Fintech in Vietnam: overview".