- The central bank of Vietnam has announced that it will investigate the prospect of permitting commercial banks in the country to work with foreign payment providers and similar firms.
- Currently, they are only permitted to work alongside international banks and card issuers – but this could soon change thanks to the State Bank of Vietnam.
- Banks in the country are calling on the central bank to press ahead with the decision, which could help improve the competitiveness of the country’s financial sector in the face of pressure from emerging cashless payments methods used in international payments.
The Vietnamese central bank is drafting new regulations to allow the banks in the country co-operate with international payment companies and favour the use of wallets and other cashless payment methods that do not involve the use of a bank account in international payments. This will likely improve the bank's cross-border offering.
The State Bank of Vietnam said that it would write up a note exploring the prospect of making cashless payments easier for companies in the Southeast Asian country.
If brought into practice, the new system would permit both intermediary firms and also Vietnam-based business banks to better work alongside international payment providers.
Currently, this is not permitted – banks in Vietnam are allowed to work with international banks and card issuers, but not payments firms.
The move comes against a backdrop of changing demand for payments services in the country – and clamours from banks for a change in the law.
Mobile wallet services such as the Chinese WeChat Pay, which is used by visitors from China who come to the country each year, are increasingly in demand.
From the perspective of banks within Vietnam, a change in approach on the part of the central bank might make this process easier.
In an interview, one senior figure at a local bank said that the change was needed in order to boost the competitiveness of the Vietnamese banking market.
Nguyen Hung, who serves as the general director of TPBank, argued that accepting and processing payments from the likes of Alipay was causing difficulties for companies like his.
“We are getting ready to start but must wait for the green light from the central bank,” he was quoted as saying.
In a statement, a leading figure at the central bank appeared to agree that a change in approach was required in order to help the country’s financial sector flourish.
Pham Tien Dung, who serves as the director of the central bank’s payment department, argued that the range of choice on offer to customers ought to be expanded – even if that required a radical change in definitions.
“It is clear that the definition of international payment must be changed. People should be able to make international payments through their banks and also via intermediary payment methods,” he said.
He also attributed the need for a fresh approach to what he described as a “changing world”.
“In a changing world, the management method needs to change,” he said.
From Vietnam to the West, innovation in international money transfers is happening everywhere – if you would like to know more about what these providers can offer, why not simply head over to our reviews page?
