Prevent the abuse of credit card swiping for cash

In order to control, prevent and stop the illegal use of bank cards, control risks and ensure safety in card operations, the State Bank has issued a document requesting payment service providers to strengthen supervision and control of bank card operations.

Accordingly, the State Bank requires heads of units to immediately direct the implementation of preventive measures to prevent card accepting units from colluding with cardholders to make fake payment transactions even though there is no purchase or sale of goods or provision of services.

For credit cards, payment service providers must clearly state that this type of card cannot be used for money transfers.

Payment service providers, when signing card payment contracts with card accepting units, must also specify this content in the contract. At the same time, there must be measures to closely monitor, inspect, and manage card accepting units.

If a card accepting unit is found to be making a fraudulent payment transaction, it must immediately take action and report to the competent state agency.

Along with that, the State Bank also requires these units to review and re-examine all internal processes, procedures, and registration documents for issuing and using bank cards.

For credit cards, payment service providers must clearly state that this type of card cannot be used for money transfers. At the same time, credit cards also do not allow customers to use them to deposit money, credit to payment accounts, domestic debit cards or prepaid cards.

These organizations must have measures to control and prevent forms of credit card abuse for illegal use such as topping up e-wallets, paying for goods, etc.

For prepaid cards, organizations must strictly comply with legal regulations and instructions of the State Bank.

In addition, the State Bank also requires each payment service provider to have measures to strictly manage the scope of card usage and limits, especially international debit cards abroad. Including direct transactions or online transactions on foreign websites.

Illegal card transactions abroad that are not in accordance with the provisions of the Card Issuance and Usage Contract must be monitored, detected early and strictly handled.

In case of detecting that a foreign bank card is used with large value, high frequency and there are signs of suspected violations of anti-money laundering regulations, it is necessary to immediately report to the competent state agency for investigation and handling.

Many individuals take advantage of swiping credit cards to redeem cash at card acceptance points and enjoy a 0% interest rate for 45 days on the amount swiped.

This document was issued by the State Bank of Vietnam right on the occasion of the Lunar New Year 2019 when people's demand for transactions via bank cards increased sharply.

Recently, there have been cases in the market where merchants accepting card payments collude with credit card holders to allow deposits and credits to payment accounts and e-wallets. In reality, swiping the card is not intended to pay for any purchase or sale of goods or services for the cardholder. Through these transactions, credit card holders will be able to exchange for cash to enjoy 0% interest for 45 days according to the policies of credit card issuers.