A broad overview of some notable points of Circulate No. 23 are as follows:
1. Customer identification and verification (KYC)
KYC on e-wallet service customers
Circular No. 23 newly provides for customers' applications for opening e-wallets, which includes minimum mandatory information depending on the type of customer (i.e., individuals, organizations or individuals having payment accounts opened via the individuals' custodians or legal representatives).
Following that, e-wallet service providers must examine and ensure the customers' applications to be sufficient and valid in accordance with Circular No. 23. E-wallet service providers must review the applications collected before 07 January 2020 for opening an ewallet and collect additional customer information, as well as verify the customer information in accordance with Circular No. 23 within 6 months from 07 January 2020. Upon the expiry of such term, if they cannot collect additional information from the customers in accordance with Circular No. 23, e-wallet service providers must suspend from providing the e-wallet service to such customers.
KYC on payment acceptance units
In cases of directly partnering with payment acceptance units, providers of electronic payment gateway service or support services for payment service (i.e., support service for cash collection and payment service, support service for electronic money remittance service and e-wallet service), and/or partner banks (i.e., banks, branches of foreign banks partnering with the IPS providers in providing IPS) are required to:
- establish internal rules for KYC and selection and development of payment acceptance units;
- perform KYC measures (e.g., customer identification, verification and classification) on the payment acceptance units;
- regularly supervise and closely monitor the operation of the payment acceptance units in the implementation of agreements signed with them; and
- guide the payment acceptance units in technical procedure and confidentiality in payment via IPS.
In addition to the above requirements, electronic payment gateway service providers must request the payment acceptance units to open bank accounts to receive payment for their provision of goods and services.
2. Detailed guidance on the provision of e-wallet service
E-wallets to be linked to payment accounts/debit cards before using
E-wallets must be linked with payment accounts/debit cards (which are linked with payment account denoted in VND) before the customers commence use of e-wallet services. The e-wallet can be linked with one or more of the customer's payment accounts or debit cards opened at the associated banks.
The uses of e-wallet
E-wallet top-up must come from the e-wallet owner's payment accounts/debit cards and/or from other e-wallets opened by the same e-wallet service provider. E-wallets can be used for payment for legal goods and services, transferring money to other e-wallets opened by the same e-wallet service provider and withdrawing money from the e-wallet to the customers' payment accounts/debit cards.
VND 100 million (approx. USD 4,290) is the maximum monthly transaction limit performed via e-wallets by an individual at an ewallet service provider, except for the individual being a payment acceptance unit partnering with the e-wallet service provider.
E-wallet service providers are not allowed to extend credit to customers, or pay interest on e-wallet balance, or otherwise having any offer to increase the amount in an e-wallet over and above the amount that the customers deposited into the e-wallet.
Specific tools for SBV's supervision over E-wallet service provision
E-wallet service providers must provide tools to enable the SBV's supervision over e-wallet service provision, such as the total number of e-wallets issued, activated and in operation, the information of each payment guarantee account for e-wallet services, and the information of the 10 e-wallets having the highest number of transactions and 10 e-wallets having the highest transaction value. Such requirement must be complied within 3 months from 07 January 2020.
3. New guidance on Electronic Clearing System
Circular No. 23 newly provides for an electronic clearing system ("EC System"). Under the SBV Statement explaining the reason behind this amendment, the EC System serves as the basis for the implementation of the Automated Clearing House (ACH) for retail payment transactions in Vietnam.
The EC System is the payment system built, owned and operated by the Organization in charge of the EC System, typically the IPS provider licensed by the SBV to provide financial switching service and electronic clearing service and participate, directly connect to the interbank electronic payment system in order to perform electronic clearing (e.g., currently, NAPAS). Members of the EC System are payment service providers, IPS providers and other organizations satisfying the member requirements and standards as provided by the Organization in charge of the EC System.
Circular No. 23 also provides for the types of and the conditions needed to be satisfied to be an EC System member, the electronic clearing limit, the processing of payment transactions via the EC System, and the electronic clearing settlement.
4. Other changes
Banks can only partner to provide IPS with organizations other than banks which are licensed by the SBV.
New guidance on the opening of payment guarantee account
Under Circular No. 39, payment guarantee accounts shall only be opened at commercial banks. Circular No. 23 generally provides that payment guarantee accounts may be opened with banks and branches of foreign banks that have agreements with IPS providers in cooperating to provide IPS.
Rather than the only option of opening a payment guarantee account, providers of support services for collection and payment services may agree with the partner bank on other payment guarantee measures such as an escrow account.
Detailed guidance on the uses of payment guarantee account
Payment guarantee accounts for e-wallet services can only be used to:
a) Deposit payments into payment accounts or debit cards opened by the payment accepting units at the acquiring banks;
b) Send reimbursements to payment accounts or debit cards of customers (e-wallet owners) in the following cases:
i. Customers withdraw money from e-wallets to the customers' payment accounts or debit cards;
ii. Customers no longer want to use e-wallets;
iii. E-wallet service providers cease providing e-wallet services to customers;
iv. E-wallet service providers terminate their business, are deprived of licenses, are dissolved or bankrupt in accordance with the relevant laws;
c) Deposit payments into the payment accounts of public service providers where customers use e-wallets to make payments, pay fees or charges for legal public services as provided by the relevant laws;
d) Transfer money into payment guarantee accounts for other e-wallet services which are opened by the same providers of the e-wallet service.