Vietnam’s financial landscape is set to further transform on July 1, 2024, when the government’s long-awaited Decree No. 52/2024/ND-CP dated May 15, 2024 (“Decree 52”), will officially replace Decree No. 101/2012/ND-CP dated November 22, 2012, on non-cash payments (“Decree 101”). Decree 52 marks an important milestone by introducing the country’s first-ever legal definition of e-money. In addition, the decree brings forth new updates to regulations governing payment and intermediary payment services, laying the groundwork for more comprehensive guidance that will be provided in draft circulars now being developed by the State Bank of Vietnam (SBV). Non-Cash Payment Instruments The new definition of non-cash payment instruments under Decree 52 expands upon the previous definition in Decree 101. Notably, it clearly specifies the issuing entities as payment service providers, financial companies licensed to issue credit cards, and e-wallet service providers. Additionally, the new definition further clarifies that bank cards include debit, credit, and prepaid cards, and adds e-wallets to the list of non-cash payment instruments. Unlawful non-cash payment instruments are still defined as those that are not otherwise specified. E-Money Prior to Decree 52, the concept of e-money lacked a precise legal definition, despite its growing prevalence in forms like prepaid cards and e-wallets. The absence of a clear framework for e-money led to confusion with terms like “cryptpcurrency” and “virtual currency” and left significant ambiguity on whether e-money includes certain instruments, such as online game cards and mobile money. Decree 52 addresses this issue by clearly defining e-money as value in Vietnamese dong (VND) stored electronically and prepaid by customers to banks, foreign bank branches, and e-wallet service providers. It also specifically designates e-wallets and prepaid cards as types of storage mechanisms for e-money. Non-Cash Payment Services Decree 52 categorizes non-cash payment services into services with and without client payment

As non-cash payments continue to surge in Vietnam, the requirement for strong security standards and a clear legislative framework for intermediary payment services (“IPS”) is becoming more and more critical. Recognizing this, the State Bank of Vietnam (“SBV”) has been working on a draft decree to supersede the outdated Decree No. 101/2012/ND-CP dated November 22, 2012, on non-cash payments (“Draft Non-Cash Payment Decree”), which will lay the groundwork for non-cash payments in general and the provision of IPS in particular. Building upon this, the SBV recently issued a draft circular to replace Circular No. 39/2014/TT-NHNN dated December 11, 2014, on IPS (“Circular 39”) (“Draft IPS Circular”), which will offer more detailed guidance on the provision of IPS in Vietnam on top of the Draft Non-Cash Payment Decree. The Draft IPS Circular will be applicable to (i) IPS providers; (ii) foreign organizations providing IPS in Vietnam; and (iii) organizations and individuals involved in the provision of IPS. Some key updates regarding the Draft IPS Circular are as follows: Scope of Application The Draft IPS Circular sets out further guidance for the provision of IPS as listed under the Draft Non-Cash Payment Decree, including: (i) electronic clearing services; (ii) electronic wallet (“e-wallet”) services; (iii) collection and payment support services; (iv) financial switching services; (v) international financial switching services; and (vi) electronic payment gateway services. Notably, the Draft IPS Circular has explicitly excluded from its scope of application the provision of accounts by goods/service providers to their customers solely for the purpose of payment within the systems of such providers (e.g., cards/coupons or service/transaction accounts of online game service providers, transportation service providers, or securities companies, etc.). Requirements on the Provision of IPS Electronic Clearing Services: The Draft IPS Circular introduces regulations to cover certain elements of electronic clearing services that have

Vietnam’s Ministry of Public Security (MPS) is drafting two reports to present to the government in May 2024 to advocate for the development and adoption of a Law on Personal Data Protection. These reports include an assessment of the policy impact of the proposal to develop a personal data protection law, and an assessment of the current state of social relations related to personal data protection. Decree No. 13/2023/ND-CP on Personal Data Protection (PDPD), adopted in April 2023, became the first comprehensive legal instrument on data protection in Vietnam. When the National Assembly was debating its text and adoption in 2022 and 2023, questions were raised as to the status of this new regulation and the legality to adopt a decree before a law. In accordance with the public announcements made throughout the development of the PDPD assuring that a law would be developed at a later stage, the MPS is now advocating for the development of a Personal Data Protection Law and has drafted the two reports pursuant to the Law on the Promulgation of Legal Documents. The main arguments advanced by the MPS in the two reports are as follows: As the right to privacy is enshrined in the Constitution, any restrictions thereof must be made through a law and not a decree. The MPS is notably referring to the lawful basis for processing and limited exceptions to consent under the PDPD. This may be a sign that the MPS intends to widen the exceptions to consent under the new law. The definitions of “personal data” and “personal data protection” need to be harmonized to consolidate the regulatory framework. The MPS indicates that there are 69 legal documents directly related to “personal data protection” in Vietnam with more than 10 different definitions, while “personal information” appears in

Last year, the government of Vietnam issued the Personal Data Protection Decree (PDPD), which took effect on July 1, 2023. The Department of Cybersecurity and High-Tech Crime Prevention and Control (referred to as “A05”) under the Ministry of Public Security (MPS) is tasked with implementing and enforcing the requirements under the PDPD. While a decree on sanctioning provisions for noncompliance with the PDPD is still pending issuance, further movements from the MPS/A05 indicate that it aims to start conducting its first inspections into PDPD compliance. This is the first time that companies and government agencies have been officially questioned by the MPS about their compliance with the PDPD. The purposes of this inspection program are (1) to evaluate the compliance status of a group of selected companies and government agencies and to understand challenges in complying with the PDPD requirements; (2) to propose sanctions for noncompliance; and (3) to collect information and comments for the development of the upcoming Personal Data Protection Law—not to spot noncompliance with the PDPD specifically. This round of inspection includes a number of companies in 14 sectors (including e-commerce, aviation, telecom, banking and finance, intermediary payment, insurance, gaming, education, healthcare, real estate, data processing services, ride hailing, etc.). The companies targeted by this inspection program must: (1) submit a report on compliance to the MPS/A05 by May 30, 2024 (this report is different from the data protection impact assessment (DPIA)/transfer impact assessment (TIA) submission requirements); and (2) coordinate with the MPS/A05 on any further investigation actions from June to August 2024. The inspection results will be available by September 2024. Key information to be reported includes, among others: (1) a description of the activities and measures carried out to implement the PDPD (such as protecting data subjects’ rights, performing administrative procedures, preventing violations, etc.)