On 25 December 2019, the State Bank of Vietnam (“SBV”) issued Circular No. 28/2019/TT-NHNN amending some articles of Circular No. 19/2016/TT-NHNN guiding on bank cards operations (“Circular 28”). Circular 28, which contains 11 amended and supplemented articles, will take effect on 01 April 2020.

Notable changes

1. Definition articles

a. Non-physical bank cards

Beside two characteristics which are does not exist in physical form but electronic form and used for transaction on Internet or application on mobile devices, Circular 28 additionally exclude the case in which physical bank cards with function for transaction on internet or mobile devices’ application.

b. Transactions

In order to clarify definition of card transactions, Circular 28 has added two points regulating domestic card transaction and non-payment transaction at a merchant, namely:

  • Domestic card transaction means a card issued in Vietnam is used to make a transaction at an ATM or via a point-of-sale (“POS”) terminal in Vietnam.
  • Non-payment transaction at a merchant means a card or card’s information is used to pay for goods or services without actual occurrence of any sale of goods or provision of services.

c. Bank Identification Number (“BIN”)

Previously, BIN is only defined as a set of numbers to indicate a card issuers as prescribed by the SBV but Circular 28 has supplemented the case for cards with international or foreign BIN in which these BINs will be managed as prescribed in regulations of the international card associations or foreign countries issuing them.

  1. Violation

Compared to previous circular, Circular 28 adds the case when an individual or an organization facilitates others to conduct a fraud card transaction or non-payment transaction at a merchant will also be considered as violation under the law.

  1. Article on cardholders

Compared to previous circular with only general provisions, Circular 28 has more explicit provisions on cardholders being organizations. Accordingly:

  • Organization being eligible to open a payment account will be permitted to use debit cards.
  • Organization which is a legal entity established and operated in accordance with Vietnamese laws will be permitted to use credit cards, debit cards and prepaid cards.

In addition, Circular 28 allows person from 15 years old to under 18 years old whose legal capacity is not completely or partially limited, to use debit cards, credit cards and prepaid cards without having written consent of his/her legal representative.

  1. Scope of cards usage

Circular 28 keeps the regulation on usage scope of debit cards and identified prepaid cards but adds detailed rules on usage scope of credit and anonymous prepaid cards as follow:

  • Credit cards can be used to pay for goods and services, to deposit and withdraw cash as agreed between cardholder and the card issuer. Credit card cannot be used to transfer money to a checking account, debit cards and prepaid cards.
  • Anonymous prepaid cards can be used to pay for goods and services via all POS terminals in Vietnam and cannot be used to conduct cards transactions on the Internet or via mobile applications or to withdraw cash. To deposit into anonymous prepaid cards must comply with Clause 2 Article 14 of Circular 28.
  1. Prudential measures in card usage

In order to protect cards usage, Circular 28 stipulates that when entering into contract with a  merchant, acquirer must require the merchant to provide documents proving their legal business activities. Acquirer shall create criteria to select qualified merchant and conduct first and periodical evaluation of each merchant.

Moreover, it is compulsory for card issuer, acquirer, switching organization to comply with laws on foreign exchange management, personal data protection, personal privacy, confidential documents, card information, card transactions and cardholder’s account when entering into an agreement according to Circular 28.

  1. Effective time

In Circular 28, the Clause 2 Article 24 regulates the switching for domestic transactions of cards with BINs issued by international associations or foreign countries between card issuers, acquirers and international card associations must be carried out through portal operated by a card switching organization licensed by the SBV, has been extended its effective time until 01 January 2021.

Besides all above mentioned changes, Circular 28 also contains the appendix replacing the appendix of previous circular, therefore, to notify about the template of bank card, the card issuer must refer to Circular 28.


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