Preventing the misuse of credit card swiping to exchange for cash.

In order to control, prevent, and deter the misuse of bank cards, and to manage risks and ensure the safety of card operations, the State Bank of Vietnam has issued a document requiring payment service providers to strengthen supervision and control of bank card operations.

Accordingly, the State Bank of Vietnam requires heads of units to immediately direct the implementation of measures to prevent card-accepting units from colluding with cardholders to carry out fraudulent payment transactions even when no goods or services are actually purchased or provided.

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 merchants, must also specifically stipulate this content in the contract. At the same time, they must implement measures to closely monitor, inspect, and manage card-accepting merchants.

If a card-accepting unit is found to be processing fraudulent payment transactions, immediate corrective measures must be taken and the matter reported to the competent state authority.

In addition, the State Bank of Vietnam also requested these units to review and re-examine all internal processes, procedures, and registration documents for the issuance and use of bank cards.

For credit cards, payment service providers must clearly stipulate that this type of card cannot be used for money transfers. Furthermore, credit cards should not be used to top up or credit payment accounts, domestic debit cards, or prepaid cards.

These organizations must implement measures to control and prevent the misuse of credit cards, such as topping up e-wallets or paying for goods.

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

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

Illegal card transactions conducted abroad, which do not comply with the regulations in the Card Issuance and Use Agreement, must be monitored, detected early, and dealt with strictly.

In cases where a foreign bank card is found to be used frequently for large sums of money and suspected of violating anti-money laundering regulations, the competent state authority must be immediately notified for investigation and handling.

Many individuals exploit credit card swiping to obtain cash at card-accepting locations and enjoy a 0% interest rate for 45 days on the amount swiped.

This document was issued by the State Bank of Vietnam right before the Lunar New Year of the Pig 2019, when the demand for bank card transactions among the public increased sharply.

Recently, the market has seen cases where merchants accepting card payments collude with credit card holders to allow them to top up and credit their payment accounts and e-wallets. In reality, the card swipes are not intended to pay for any goods or services for the cardholder. Through these transactions, credit card holders receive cash to earn 0% interest for 45 days, according to the policies of the credit card issuers.