Circular No. 26/2017/TT-NHNN Amending and Supplementing Certain Articles of Circular No. 19/2016/TT-NHNN dated June 30, 2016 of the Governor of the State Bank of Vietnam on bank card activities

CIRCULAR

Amending and supplementing certain Articles of Circular No. 19/2016/TT-NHNN dated June 30, 2016 of the Governor of the State Bank of Vietnam on bank card activities

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

Pursuant to the Law on Credit Institutions dated June 16, 2010;

Pursuant to the Law Amending and Supplementing Certain Provisions of the Law on Credit Institutions dated November 20, 2017;

Pursuant to the Foreign Exchange Law dated December 13, 2005 and the Law dated March 18, 2013 amending and supplementing certain articles of the Foreign Exchange Law;

Pursuant to Decree No. 101/2012/NĐ-CP dated November 22, 2012 of the Government on non-cash payment; Decree No. 80/2016/NĐ-CP dated July 1, 2016 of the Government amending and supplementing certain articles of Decree No. 101/2012/NĐ-CP dated November 22, 2012 of the Government on non-cash payment;

Pursuant to Government Decree No. 16/2017/NĐ-CP dated February 17, 2017 on the functions, tasks, powers, and organizational structure of the State Bank of Vietnam;

At the proposal of the Head of the Payment Department and the Head of the Foreign Exchange Management Department;

The Governor of the State Bank of Vietnam promulgates This Circular amends and supplements amending certain provisions of Circular No. 19/2016/TT-NHNN dated June 30, 2016 of the Governor of the State Bank of Vietnam on bank card activities.

Article 1. 1. Amend and supplement Point d of Clause 2 of Article 24 as follows: amending certain provisions of Circular No. 19/2016/TT-NHNN dated June 30, 2016 of the Governor of the State Bank of Vietnam on bank card activities

1. Amends Clause 5 and adds Clause 21a to Article 3 as follows:

“5. Joint brand card means a card simultaneously bearing the brand of a domestic card switching organization and the brand of an international card organization or a foreign card switching organization.”

“21a. Card payment via Quick Response Code (QR Code) refers to the use of QR Code for paying for goods and services with a card at service providers; including Merchant-Presented QR Code and Consumer-Presented QR Code forms.”

2. Amends Clause 2 and adds Clauses 7 and 8 to Article 8 as follows:

“2. Engaging in, organizing, or facilitating others to engage in fraudulent or counterfeit card transactions; making false payment transactions at service providers (without the occurrence of goods sales or service provision).”

“7. Service providers transferring card acceptance devices, QR Codes to other parties for use; accepting card payments without a card payment agreement; using card acceptance devices, QR Codes of domestic card issuers or foreign card issuers improperly.”

“8. Buying, selling, renting, leasing cards or card information, opening cards for others (except for anonymous prepaid cards).”

3. Amends Clause 2 and Clause 5 of Article 10 as follows:

“2. Before issuing a new type of card or changing the design of an existing card, the card issuer shall notify the State Bank of Vietnam about the card design according to the form attached to this Circular. In case of issuing virtual cards, the card issuer shall submit documentation describing the issuance of virtual cards as stipulated in Clause 1 of this Article along with the notification.”

“5. Before signing a card issuance and usage agreement with customers, the card issuer shall require cardholders to provide all necessary information and documents to identify the customer in accordance with the law. In case of issuing cards to foreigners, the card issuer shall require customers to provide necessary documents to verify their residence period in Vietnam, including: passport, visa, temporary residence certificate, residence permit, permanent residence permit, labor contract, admission decision, or other documents proving the residence period in Vietnam.”

4. Amends Point b Clause 1 and adds Clause 3 to Article 12 as follows:

“b) The name of the card switching organization that the card issuer is a member of (abbreviated name or trademark of the card switching organization), except in cases where the card does not have the feature of transacting through the card switching service of the card switching organization;”

“3. When issuing joint brand cards, the card issuer must ensure that the placement of the trademarks of the domestic card switching organization and the international card organization or foreign card switching organization is not discriminatory among organizations (logos must be of the same size, placed on the same side of the card and either colored logos or black-and-white logos).”

5. Amends Clause 1 and adds Clause 1a to Article 14 as follows:

“1. The card issuer shall agree with the cardholder on the payment limit, transfer limit, cash withdrawal limit, and other limits applicable to the use of the card by the cardholder in accordance with this Circular, current laws on foreign exchange management, and other relevant laws.”

“1a. For the daily limit of foreign currency cash withdrawals abroad, a card can withdraw up to the equivalent of 30 million Vietnamese dong in foreign currency cash.”

6. Amending and supplementing Clause 1 of Article 15 as follows:

a) Amends Point c(i) Clause 1 of Article 15 as follows:

“(i) Cardholders falling within the scope prescribed in Clause 1 and Clause 2 of Article 16 of this Circular and not being prohibited from credit under Article 126 of the Law on Credit Institutions (as amended and supplemented);”

b) Adds Point d to Clause 1 of Article 15 as follows:

“d) The credit limit for individual credit cards prescribed in Clause 1 of Article 126 of the Law on Credit Institutions (as amended and supplemented) is as follows:

(i) In the case of issuing credit cards with collateral: the credit limit granted to the cardholder is determined by the internal regulations of the card issuer regarding credit through credit cards and is a maximum of 1 billion Vietnamese dong;

(ii) In the case of issuing credit cards without collateral: the credit limit granted to the cardholder is a maximum of 500 million Vietnamese dong.”

7. Amends Point b Clause 1, Clause 2, Point c Clause 3 and adds Clause 4 to Article 16 as follows:

“b) Individuals aged 15 years or older but under 18 years old who are not deemed to be incapacitated or partially incapacitated may use debit cards, credit cards, and prepaid cards.”

“2. For corporate cardholders: Legal entities established and operating legally in accordance with Vietnamese law may use various types of cards. Corporate cardholders authorized in writing by a legal entity to use the entity's card or allowing individuals to use subsidiary cards in accordance with this Circular.”

“c) Individuals aged 6 years or older but under 15 years old who are not deemed to be incapacitated or partially incapacitated may use debit cards and prepaid cards upon written consent from their legal representatives.”

“4. In cases where the card users specified in Clause 1 and Clause 3 of this Article are foreigners, they must be permitted to reside in Vietnam for a period of 12 months or more.”

8. Adds Point d to Clause 3 of Article 17 as follows:

“d) Cards may be used to pay for lawful goods and services in accordance with Vietnamese law, including purchases made abroad.”

9. Amends Point b, Point g Clause 1 and Clause 3 of Article 18 as follows:

"b) Disseminate and guide customers on card services, correct procedures for using cards, potential risks when using cards and how to handle incidents, prohibited behaviors when using cards, and the responsibilities of cardholders for violations;"

"g) Closely monitor to ensure that overseas card payments comply with their intended purposes, the usage limits specified in this Circular, and foreign exchange management regulations;"

"3. The Card Issuing and Payment Organization:"

"a) Coordinate with card acceptance organizations, card switching organizations, electronic transaction settlement organizations, service providers, relevant authorities, and other related parties in preventing and combating crimes related to card activities;"

"b) Establish criteria for selecting service providers and conduct evaluations and classifications of entities with the need to accept card payments, in accordance with their business characteristics and industries;"

"c) Implement strict inspection and management measures for service providers, particularly those with wireless POS installations. In cases where prohibited actions as stipulated in Article 8 of this Circular are discovered or suspected, the Card Issuing and Payment Organization shall notify the competent agencies or organizations responsible for receiving reports of criminal offenses or initiating prosecutions, or other authorized agencies to cooperate in monitoring, handling, and applying appropriate preventive measures, including terminating the card payment contract with such service provider;"

"10. Supplement Clause 2a, 2b, and 2c to Article 20 as follows:"

"2a. Card Acceptance Organizations must apply at least two methods for receiving cardholder dispute inquiries, including through a call center (with recording, operating 24 hours a day, 7 days a week) and through the organization's transaction points; ensuring verification of basic information provided by cardholders;"

"2b. Card Acceptance Organizations must immediately implement measures to block cards upon request by cardholders due to suspicion of fraud or loss, and bear full financial responsibility for losses incurred by cardholders from card usage after the blocking time;"

"2c. Card Acceptance Organizations shall develop a form for cardholders to use when making dispute inquiries. If receiving information through a call center, if deemed necessary according to internal regulations of the Card Acceptance Organization or agreements with related parties, the Card Acceptance Organization may require cardholders to provide a formal dispute inquiry form within the specified timeframe. In cases of authorizing others to make dispute inquiries, cardholders shall follow the legal provisions on authorization;"

"11. Amend Point b and supplement Point e to Clause 3 of Article 22 as follows:"

"b) Organize the installation of card acceptance devices at sales points or issue QR Codes to service providers, establish connection channels and other technical and operational conditions for card payments according to contracts signed with service providers. The Card Issuing and Payment Organization must have measures to manage its wireless POS (requiring service providers to register the usage range of wireless POS in the card payment contract and other necessary measures);"

"e) Require service providers to open settlement accounts with the Card Issuing and Payment Organization to receive payments from card acceptance; require service providers to provide transaction invoices and documents according to the Card Issuing and Payment Organization's regulations or in necessary situations to control the legality of card transactions;"

"12. Amend Clause 3 and Clause 4 of Article 27 as follows:"

"3. Card Acceptance Organizations are responsible for notifying the Card Issuing and Payment Organization in writing or via data messages about cases as stipulated in Clauses 1 and 2 of this Article; upon receipt of notifications from domestic Card Acceptance Organizations, foreign Card Acceptance Organizations, or international card networks in writing or via data messages regarding cases as stipulated in Clauses 1 and 2 of this Article, the Card Issuing and Payment Organization is responsible for notifying the service providers;"

"4. Notifications about card payment rejections (including those from foreign Card Acceptance Organizations and international card networks) take effect from the moment the relevant parties involved in card payment transactions receive the notification in writing or via data messages. After receiving the notification, if the relevant party still makes card payments resulting in card misuse, the determination of liability shall be agreed upon by the parties;"

"13. Amend Clause 2 of Article 32 as follows:"

"2. Clause 2 of this Circular takes effect from January 1, 2019;"

Article 2. Responsibility for Implementation

The Director of the Office, Heads of the Payment Department, Heads of the Foreign Exchange Management Department, Heads of relevant units under the State Bank of Vietnam, Governors of the State Bank of Vietnam branches in provinces and centrally-administered cities, Chairmen of the Board of Directors, Chairmen of the Board of Members, General Managers (Directors) of credit institutions, foreign bank branches, card switching organizations, and electronic transaction settlement organizations are responsible for implementing this Circular;

Article 3. Effectiveness

"1. This Circular takes effect from March 3, 2018, except for the provisions in Clauses 2 and 3 of this Article;"

"2. Point b of Clause 6 of Article 1 of this Circular takes effect from January 15, 2018;"

"3. Clause 13 of Article 1 of this Circular takes effect from January 1, 2018;"

"4. This Circular abolishes Clause 1 and Clause 6 of Article 1 of Circular No. 30/2016/TT-NHNN dated October 14, 2016, issued by the Governor of the State Bank of Vietnam amending and supplementing certain Circulars on payment service provision and payment intermediary services./."