tóm tắt tiếng anh hoàn thiện cơ chế quản lý hoạt động thanh toán qua các tổ chức cung ứng dịch vụ thanh toán ở việt nam

1
INTRODUCTION

In recent years, the market economy in our country managed by
the State with socialist orientation has developed comprehensively
with high speed in which there is a significant development of
payment service providers, methods of payment and payment tools
creating strong changing step in the payment activity. However, in
addition to that development, the payment activity of payment service
providers has many weaknesses, shortcomings, especially in
organization and management as follows: The organization scale is
still small and narrow with the nature of lording over a region,
ununited and unassociated together. The system of payment tools and
services developed but the payment regime and policy are insufficient,
non-synchronous and not managed closely leading to losses and risks
in payment, especially the rate of payment in cash is really high.
Before that reality, the research and proposal of solutions to
complete the management regime for payment activity through payment
service providers are urgent for the innovation, modernization of the
bank system and the enhancement of competitive capacity of credit
organization system in Viet Nam. Therefore, the author chose the
subject “Completing the management regime for payment activity
through payment service providers in Viet Nam”.
Structure of the thesis:
In addition to the introduction, list of abbreviation, list of tables,
conclusion, reference, the thesis include 3 chapters:
Chapter 1: Theoretical foundation of management regime for
payment activity through payment service providers in the economy
Chapter 2: Reality of management regime for payment activity
through payment service providers inVietnam

Chapter 3: Solutions and recommendations to complete
management regime and organization for payment activity through
payment service providers inVietnam

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CHAPTER 1: THEORETICAL FOUNDATION OF
MANAGEMENT REGIME FOR PAYMENT ACTIVITY
THROUGH PAYMENT SERVICE PROVIDERS IN THE
ECONOMY

This chapter mentions the theories of payment and management
regime for payment activity through payment service providers in the
economy
The author presented systematically and logically the contents
into five parts:
First part:
Firstly, starting from the formation and development
of the payment activity then evidencing the final theory that the
payment comes into the world from the implementation of currency
functions and necessary, important concepts. The theory is as follows:
“Payment is a method of using currency as a measurement to
pay for goods, pay tax, salary, pay for other services in social and
economic activities”
“Payment not in cash is the payment carried out by transferring
money from the account of the payer to the account of the beneficiary
or balancing each other through payment service providers”
“Payment service is the supply of means, methods of payment
and other payment services to transact the payment”
Secondly, this chapter presents the role of payment activity in the
economy including: role to the bank; role to customers; role to the

economy.
Thirdly, Function of payment activity
Second part
: Presenting, analyzing the management of payment
activity
Firstly, Concept of management: There are many different
approaches to give out a concept of management. According to the
systematic approach, it is possible to give out the concept:
“Managemetn is the organizational and oriented impact of the
management subject on the management entity, management object in
order to use in the most effective way the resources, opportunities of
an organization to achieve designated targets in the fluctuated
environment”.

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Outline 1.1: Systematic approach in management
(Source: Academy of Finance, Syllabus of Management science, p. 13)

Management is the combination of efforts of everyone in the
organization and best use of resources of the organization to achieve
the common target of the organization and particular target of each
person cleverly and efficiently. Management must answer the

following questions: “Which target must be achieved?” “How and in
what way is the target achieved?”.
Secondly, Concept of payment activity management
From the targets in oriented plan and general solutions to
develop the socio-economy of the country in which there is the
oriented target to develop the activity of banking sector to the
implementation organization including the relationship responsibility
of ministries, relative sectors and responsibility of local authorities
(provinces, cities directly under the Central Government), it is
possible to give out the concept of payment activity management as
follows: The State (the Central Bank) uses policy regime to organize
and impact the payment activity of payment service providers in order
that the payment activity in the economy is transparent, favourable
with highest efficiency.
Thirdly, Concept of management regime for payment activity
“The management regime for payment activity is the method of
managing payment activity following the direction, guidance of the
State on the basis of requirements of the socio-economic development
by suitable methods, forms and tools”
Management
entity
Management
subject
Management
target
Management
object


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 Role of payment regime to the implementation of
currency policy of the Central Bank
 Role of the Central Bank in the development of
payment regime in the market economy
Third part:
Contents of managing payment activity
- Setting, building legally normative acts.
- Instructing and organizing the implementation of legally
normative acts on payment activity
- Considering to license and supervising the implementation
- Organizing the management system for payment activity
 Efficiency in payment management: shown in
payment time, reliability of payment activity and
costs for a payment transaction
 Detailed expression of an efficient payment
organization regime is: Minimizing the risks
 Methods to reduce transaction costs to increase
service quality is possible to carry out
Fourth part
: Elements impacting the management regime for
payment activity
- Socio-economic environment
- Law environment
- Advancement of technological science and application in
operation of commercial banks
- System of payment means in providing payment service
- Payment organization model
- Management competence and human resources for payment
activity of bank system
Fifth part:

Presenting some experiences of the world on payment
organization and management for payment activity and from that
point taking out lessons for Vietnam.

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CHAPTER 2: REALITY OF MANAGEMENT REGIME FOR
PAYMENT ACTIVITY THROUGH PAYMENT SERVICE
PROVIDERS IN VIETNAM

To answer and assess the reality of management and organization
regime for payment activity through payment service providers in Viet
Nam in recent yers, the author spent much time to approach to
management divisions, payment activity of the Central Bank
(Transaction office, Department of Finance – Accounting, Informatics
centre, Department of Payment) in many ways such as: via website,
telephone and direct contact with standing division at National
payment centre. These approaches help to catch the situation, collect
necessary data and documents serving the completion of this thesis.
- With the activities of approaching and researching, necessary
documents presented in chapter 2 are fairly abundant with the
following contents:
Firstly, it is the overview on payment activity of payment
service providers.
- Overview on the innovation of banking activity, the change
from centralized plan to market regime with the State’s management
in socialist orientation
- The development of payment service providers and payment
activity organization
- Reality of payment activity organization includes:
 Methods, means of payment

 Organizations participating in payment system
 Transmission distribution and methods
Secondly, to prove the reality of payment activity organization,
the author systhesizes, analyzes the results of payment system
activities in recent years as follows:
Firstly, they are payment systems organized and managed by the
State Bank (Balancing payment system; Interbank electronic payment
system).
Secondly, they are bilateral payment systems organized by some
Credit organizations.

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Thirdly, they are small and individual automatic transactions
which are mainly credit card transaction processed via card
commutation system organized by Card commutation companies
(Banknetvn, Smartlink và VNBC).
 The detailed results are as follows:
a/ Electronic balancing payment system
The electronic balancing payment system was started in May
2002 and after 6 years of implementation to June 2008, the electronic
balancing payment system is carried out all over the country (except 5
provinces and cities implemented with phase I of the Interbank
electronic payment system which are: Hanoi, Hai Phong, Ho Chi
Minh City, Can Tho and Da Nang). In provinces and cities, the
electronic balancing payment system processes and balances the
interbank electronic payment transactions among the member banks
participating in this system in the provinces and cities (including
transaction with value under 500 million dongs, over or equal to 500
million dongs excluding transactions with value over 500 million
dongs to the external provinces).

According to the statistics of payment transactions not in cash in
2010, the rate of payment transaction via the State Bank (balancing
payment and other payments via accounts at the State Bank) account
for approximately 7.7% of transactions, 25% of transaction value not
in cash and the rate of bilateral payment transactions is about 7.4% of
transactions.
Different from the low value small system called Interbank
electronic payment system, the electronic balancing system only
transfers the payment order to the receiving bank after processing
balance final account in session (usually 2 – 3 sessions/day) because
the balancing payment system is very safe, reliable in making final
account.
According to the report data of the units who implemented, until
the end of 2010, the entire Electronic balancing payment system has
about 950 members (average members in each province or city are

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about 15-20) increased by 18.4% compared to year 2009 (in addition,
there are more than 230 members carry out Balancing payment on
paper at the five provinces mentioned above) with the total
transactions in 2010 of 9.5 million transactions achieving 2,444,827
billion dongs approximately increased by 48% in number of
transactions and nearly 95% in transaction value compared to year
2009. (Source: Report on payment activity situation of 63 branches of
the State Bank – synthesized by the Central Bank).
b/ Electronic money transfer system
The electronic money transfer system is the internal payment
system of the State Bank which has been applied since 1998 in order
to meet the demand of payment to external provinces, cities of the
State Bank as well as Credit organizations via the branches of the

State Bank. The Electronic money transfer system replaced the file
transmission payment system in the past helping to strengthen the
confidentiality and hasten the payment speed meeting the demand of
transferring money to external provinces and cities for all Credit
organizations.
Until the end of October 2008 (before implementing phase II of
the Interbank electronic payment system), the system had operated
stably, safely connecting the entire 68 units of the State Bank serving
over 690 credit organizations who opened accounts at the units of the
State Bank with the total transactions in 2008 of 890,346 transactions
(achieving 2,023,990 billion dongs, accounting for 9.5% of total
payment value processed by electronic methods) (source: Report on
payment activity situation at 63 branches of the State Bank). Since the
beginning of 2009, the electronic money transfer system was replaced
and played the role of a provision system for the Interbank electronic
payment system (in the beginning of 2009, there were 24 money
transfer transactions with the value of 28,561 billion dongs).
c/ Interbank electronic payment system
Operation situation and achieved results:

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The interbank electronic payment system is the online electronic
payment system which is modern and sponsored by the World Bank.
Currently, the interbank electronic payment system is assessed as the
fastest payment channel in Vietnam. Generally, the system operates
stably; the scale and number of transactions and transaction revenue
are increasing meeting the demand of payment and money transfer of
member units as well as improving the payment activity to be fast,
favorable, exact, safe and confidential.
- Phase I began from May 2012 to 2008. The system was only

implemented as model in 5 big provinces and cities such as Hanoi,
Hai Phong, Da Nang, Ho Chi Minh City and Can Tho.
- Phase II was deployed all over the country since the end of
2008 (pursuant to Decision No. 2751/QD-NHNN dated 13
th

November 2008 by the Governor of the State Bank).
Until the end of year 2010, the interbank electronic payment
system has been expanded for 63 branches of the State Bank in
provinces, cities, 3 units directly under the State Bank and nearly 800
direct members (branch) of 97 credit organizations (main club-house)
all over the nation which are twice as compared to year 2008 – the
point before implementing phase II of the interbank electronic
payment system. This led to the dramatic increase in the number and
value of transactions via the system with the average transaction times
of about 60,000 – 70,000 transactions/day and average revenue of
approximately 100,000 billion dongs/day.
In 2010, the total value of transactions via the interbank
electronic payment system reached 26,344,056 billion dongs with
17,375 transactions increased by about 70% in value and 39% in
number of transactions compared to year 2009 (table 03). In which the
payment transactions among units of the State Bank is 678 thousand
transactions/11,745,070 billion dongs accounting for 4% of
transactions and 44.6% of transaction value.

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Table 2.1 : Transaction data of Interbank electronic payment from 2005 to 2010

Whole system The State Bank
(*)

Total arising amount
Increase, decrease
(%)
Total arising amount
Increase, decrease
(%)
Rate (%) compared
to the whole system
Time
Number of
transactions
(transaction)
Transaction
value
(billion
dongs)
Number of
transactions
Amount
Number of
transactions
(transaction)
Transaction
value
(billion
dongs)
Number of
transactions
Amount

Number of
transactions
Amount
2005 3.456 2.171.363 112 386.529
2006 4.500 3.653.000 30,2 68,2 118 461.588 5,6 19,4 2,6 12,6
2007 6.334 7.572.000 40,8 107,3 158 673.453 33,1 45,9 2,5 8,9
2008 6.992 9.945.914 10,4 31,3 169 1.226.436 7,4 82,1 2,4 12,3
2009 12.516 15.483.978 79,0 55,7 527 3.486.803 211,0 184,3 4,2 22,5
2010 17.375 26.344.056 38,8 70,1 678 11.745.070 28,6 236,8 3,9 44,6

(Source: Report data of the State Bank in 2010)
(*): Payment transactions ordered to transfer by the branches of the State Bank

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- The low value payment flow was operated since November
2003. At the beginning, there were 13 bank eligible to participate with
the average number of transactions up to March 2008 achieving about
2,500 – 3,500 transactions/day which accounts for only 13% of
transactions/day. Until the end of year 2010, 62 out of 97 banks were
eligible and accepted to participate increasing the number of units
participating in the low value payment flow to 677 members. In 2010,
only in low value payment flow, nearly 50,000 transactions/day were
processed increasing by 40% compared to year 2009, accounting for
53.5% compared to the total number of balancing payment
transactions via the State Bank (this rate in 2009 was 45.1%).

Table 2.2: Synthesis of payment transaction via two systems called
Electronic Funds Transfer and Interbank electronic payment
Total arising amount
Increase, decrease

(%)
Year
Number of
transactions
(transaction)
Transaction
value
(billion dongs)
Number of
transactions
Amount
2005 3.801.435 4.304.291 44,3 167,7
2006 4.819.533 6.262.825 26,8 45,5
2007 6.674.512 11.225.322 38,5 79,2
2008 7.352.078 14.017.817 10,2 24,9
2009 12.516.525 19.338.042 70,2 38,0
2010 17.375.434 26.344.056 38,8 36,2

(Source: Report data of the State Bank in 2010)

The growth of payment transaction has not fluctuated much since
the merge of two systems in 2009. The high growth rate of transactions in
2009 may result from the influence of decrease in 2008. The interbank
electronic payment system received and implemented well the function of
the electronic money transfer system.
- The situation of money transfer among units of the State Bank
from 2005 to 2012: The number and value of transactions among units of
the State Bank increased dramatically in 2010 (Table 2.2). It shows that
the system is not expanded with maximum number of payment service
providers in provinces, cities to participate as direct members in order to

reduce the indirect transactions via units directly under the State Bank.


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Table 2.3 Synthesis of money transfer transaction among units of
the State Bank via Electronic Funds Transfer and Interbank
electronic payment

Electronic Funds Transfer + Interbank electronic
payment (Internal of the State Bank)
Total arising amount
Increase, decrease
(%)
Year
Number of
transactions
(transaction)
Transaction
value
(billion dongs)
Number of
transactions
Amount
2005 458.073 2.519.457
2006 438.176 3.071.413 -4,3 21,9
2007 498.389 4.326.775 13,7 40,9
2008 529.155 5.298.339 6,2 22,5
2009 527.968 7.340.868 -0,2 38,6
2010 678.016 11.745.070 28,4 60,0
(Source: Report data of the State Bank in 2010)

- Liquidity situation: according to reports from the units of the
State Bank as well as member banks of the payment system, all
member banks assure the liquidity capacity to make final account for
payment transactions. However, in 2010, although the balancing loan
and especially overnight loan of the State Bank decreased compared to
year 2009, it was really high. This showed the difficulties in liquidity
of the payment system in the difficult and unstable economy context
in 2011.
Bilateral payment among payment service providers
Currently, besides the participation of members in the payment
system managed and operated by the State Bank, the majority of credit
organizations also participate, establish bilateral electronic payment
channel with one/some bank with great scale, investment and
development in infrastructure serving the payment activity such as:
Joint Stock Commercial Bank for Foreign Trade of Vietnam (VCB-
Money system with 181 partners), Vietnam Joint Stock Commercial
bank for Industry and Trade (INCAS system with 5 banking partners),
Bank for Investment and Development of Vietnam (BIDV
Homebanking system with 7 banking partners), Vietnam Bank for
Agriculture and Rural Development (VBA system with 2 banking
partners). Vietnam Joint Stock Commercial bank for Industry and
Trade, Bank for Investment and Development of Vietnam and

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Vietnam Bank for Agriculture and Rural Development directly
connect with others to create the bilateral payment network in addition
to the great VCB-Money system of Joint Stock Commercial Bank for
Foreign Trade of Vietnam.

Table 2.4: Average bilateral payment transaction in VND

through some payment service providers who play the
central/original role in payment in 2010
No.
Payment service
providers
Average
numbers of
transaction
(transaction/day)
Average
transaction
value
(billion
dongs/day)
1 Joint Stock Commercial
Bank for Foreign Trade of
Vietnam
15.072 4.781
2 Bank for Investment and
Development of Vietnam
10.669 2.727
3 Vietnam Bank for
Agriculture and Rural
Development
14.014 2.233
4 Vietnam Joint Stock
Commercial Bank for
Industry and Trade
11.692 1.715

(Source: The State Bank synthesizes a report of payment activity of
credit organizations)

According to the assessment of Credit organizations, the
connection of the bilateral electronic payment brought high efficiency:
the payment is processed quickly; no limitation in time, place of
payment; reducing payment costs. Accordingly, this is a payment
channel chosen by most of Credit organizations mainly after closing
the payment portal of the payment system managed and operated by
the State Bank. In which, it is notable that the current VCB-Money
system of Joint Stock Commercial Bank for Foreign Trade of Vietnam
also allows to implement transactions in foreign currency (while the
State Bank has not had the system for payment in foreign currency).
Daily, VCB-Money system processes about 15,500 transactions in

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foreign currency with the converted transaction value of
approximately 86,055,000 billion dongs (equal to 860 times of the
daily average transaction value of the interbank electronic payment
system). However, also according to the assessment of Credit
organizations, to participate in this payment system, the capital of
Credit organizations is dispersed for opening mutual accounts.
Currently, the bilateral electronic payment systems are established,
implemented by the Credit organizations themselves without the
supervision, monitoring of the State Bank so there is no information to
assess the conformity with current legal regulations or the safety,
efficiency of these systems.
Thirdly, via the analysis of operation results of payment systems
in recent years, the author gave out Synthesis of results of payment
activity in the economy

Table 2.5 Synthesized rate of commercial business payments
from 2007 - 2010
Targets 2007 2008 2009 2010
1. Total volume of commercial
business payment
In which:
100 100 100 100
+ State commercial banks 77.70 73.5 70.0 63.9
+ Joint Stock Commercial Bank 9.6 9.8 10.3 11.5
+ Non-state institutions 1.5 1.3 1.0 0.8
+ Payment by state banks 14.2 15.4 18.7 23.8
2. Payment proportion of
commercial business in the total
payment method
83.64 85.4 85.99 86.0
3. The major payment methods
Payment in cash
Non-cash payment
16.36
83.64

14.6
85.4

14.01
85.99
14.0
86.0
a) Payment by check 0.21 0.15 0.10 0.09

b) Payment by payment order 91.37 82.55 91.30 91.34
c) Payment by credit collection 2.30 0.15 0.15 0.10
d) Payment by letter of credit 1.10 1.05 1.15 1.05
e) Cards and other payment 5.02 6.20 7.30 7.32
(Source: the State Bank)
(Due to not using absolute numbers, relative numbers are used %)

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Remarks:
Firstly: “for payment proportion thought banks of
commercial banks, group of State Commercial Banks takes the highest
proportion”. This proportion reflects commercial banks’functions are
monetary economy, credit and banking services presented since
having Law on the State Bank and the Law on Credit Institutions.
Group of Joint Stock Banks and non-bank institutions accounted
for 9.6% in 2007; 9.8% in 2008; 10.3% in 2009 and 11.5% in 2010, it
shows that the proportion of 2010 is still low, financial capacity is not
large. But it shows that now there is existing unequal factor in the
competition between state commercial bank system and other bank
system. Based on the implementation of equitization of some State
commercial banks and the striving of the Joint Stock Bank system, the
difference is reduced. Although in 2007 equitization has made in two
state commercial banks, Joint Stock Commercial Bank for Foreign
Trade and Joint Stock Commercial Bank for Industry and Trade, the
proportion of the new shares accounts for less than 10%.
Payments through the State Bank accounted for 14.2%, 15.4%,
18.7% and 23.8% respectively in 2007; 2008; 2009 and 2010. This
proportion reflects functions of the State Bank. Since the Bank Act
has issued, the State Bank plays the role of management, planning
macroeconomic policy for currency, credit, and banking activities.

Because the State Bank is the last creditor, monetary operations must
be existed. The State Bank which, through the operation of the
transaction departments to make refinancing loans and discount loans,
and so on. The State Bank is also the organizer of non-cash payments
- in other words, the State Bank implements management policy of the
State in macro-regulation on banks’ activities. The proportion
increased gradually because from 2009 interbank electronic payment
has been done at all 63 branches of the State Bank.
Secondly:
for the proportion of non-cash payment in the total
payment methods:
Unlike the late’ 80s and early’ 90s, the proportion of non-cash
payment has increased and the proportion of cash payments has
decreased, 16.36%; 14.6%; 14,0l % and 14% in the years from 2007
to 2010. This trend is the result of innovation - modernization of
Banks, especially since the implementation of scheme No. 291 on
non-cash payment.

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Thirdly
: On the main types of payment. In general, society
requires the payment services of banks to ensure customers’ utility. It
can be reflected in the proportion formed in payment.
Table 2.6: The proportion of non-cash payment methods
through banks
Payment order Check
Collection
order
Cards + other
payments

Year
Items Amounts Items Amounts Items Amounts Items Amounts
2006 91.5 95.62 1.35 1.8 4.15 2.2 3 0.38
2007 94.3 97.02 1 1.3 1.67 1.29 3.03 0.39
2008 95.89 92 0.15 0.37 0.29 0.9 3.67 0.73
2009 99.43 92.30 0.30 0.10 0.04 0.15 0.23 7.45
2010 98.20 92.345 0.25 0.09 0.05 0.10 1.50 7.47

(Source: Data reported by the State Bank in 2010)

a) Payment by check
Check with its proportion has not been l % of the amount.
Current check proportion is decreased rapidly, few customers use it
(mainly for payment in the same locality). Because of check’s
regulations is verbose, payment period is slower than other methods.
b) Payment by payment order (credit)
Therefore, in the non-cash payment methods, payment order
accounted for the largest absolute proportion in the terms of the
amounts and number of transactions with the proportion of over 95%.
This high proportion is still taking place throughout the history of
formation of payment method in non-cash payment system. In the
future, payment order continues in upward trend. The reason for this
situation is due to the convenience and application of electronic
transfer technology is spread in which facility of executing electronic
transfer order is payment order.
c) Payment by collection order (debt transfer order)
Accounting for small proportion of the total commercial business
payment transactions and having tends to decrease. Downward trend
is by many conveniences of card services with transaction on 24/24h.
Other forms of payment such as credit letters, collection, etc are

required by the seller should have to be existed, but will be reduced
with use of new technology in the bank's payment service.

16
d) Payment by letter of credit
Currently, this payment method is ranked the 4
th
position that
customers use because it makes the buyer must have advanced capital
to send to account at bank of the seller. However, in fact on two
parties, by the first transaction or there is not enough trust each other,
they still apply this method to ensure timely recovery of capital after
export of goods and services (the proportion over the years of only l%
is not great).
e) Card payment
By the end of 2010, the number of ATM is invested and installed
by payment service providers in the whole country to nearly 11,500
machines, an increase of more than 1,700 machines (17%) compared
with the end of 2009; POS network is also openwide to nearly 52,000
units, an increase of 52% compared with the end of 2009, serving the
payment needs of more than 30 million cards of 47 card issuers with
about 230 card brands (including two institutions without ATM, POS,
2 institutions with POS, without ATM; 15 institutions with ATM but
POS, 28 institutions with ATM and POS). There are also 2 institutions
have registered but cards have been unissued.
In general, ATM service is quite well meeting the needs of
customer’s transactions, quality of service has been improved, the
connection of ATM is increasingly expanded by alliance cards. Three
card alliances including: Banknetvn (16 members), Smartlink (28
members), VNBC (9 members).

POS services also have a new development: in September 2010,
POS system of eight banks in Hanoi and December 2010, POS system
of 15 banks in Ho Chi Minh City was interconnected.
In 2010, on average per day, about 660.85l transaction items
with cards are processed with amount of 3,066 billion dong (increased
about 34% in the number of items, 89% of the amount compared with
in 2009).

17

Table2.7: Data of domestic card transactions per day
Unit: Billion dong

Year 2008 Year 2009
Increase or
decrease (%)
Year 2010
Increase or
decrease (%)
Targets
Items Amounts Items Amounts Items Amounts Items Amounts Items Amounts
Cash
withdrawal
325.928 385 434.565 593 33.3 54.1 592.331 942 36.3 58.8
Transfer 27.310 689 59.311 1.028 117.2 49.2 68.520 2.125 15.5 106.7
Total 353.238 1.074 493.876 1.621 39.8 50.9 660.851 3.066 33.8 89.2

(Source: Data reported by the State Bank in 2010)

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Fourthly,
Presenting management status of payment activity
by payment service providers in economic transition period and
the period of 2006 - 2010 including:
- Developing, issuing laws and other legal documents
- Guiding and implementation organization
 Developing non-cash payments in the public area
 non-cash payment in the business area
 Developing non-cash payment in the residential area
 Developing payment systems
- Licensing and inspecting and monitoring the implementation
- Organizing management structure of the payment activities of
the State Bank
a) The study presented position, functions, duties and powers of
the Department for payment in the payment operations management
b) Analyzing and clarifying the role, functions and tasks of the
functional units of the State banks such as Transaction Center,
Department of Finance, and Accounting, Information Center, the State
Bank of provinces and cities are payment service providers and as
manager in each field, each tasks under the functions.
c) Clarifying the management role of commercial banks
(payment service providers) in the management system.
d) Managing payment activities in the inter-bank electronic
payment.
e) Improving the quality of management of payment activities
Fifthly: General assessment of the achievements and
limitations of payment activity management organization of
payment services providers in Vietnam from 2006 to 2010
Obtained achivements
Firstly: Along with the process of development, supplements,

amendments to Law on the State Bank and Credit Institutions and the
new development, supplements, and amendments of payment activity
management, step by step in accordance with the operation of
payment services in the country's economic development process

19
Secondly: On the implementation of control and supervision in
the management and timely detection of errors in payment activities
The operation of inspection and supervision have made it
possible for development of errors, problems making errors to
promptly address and handle
Thirdly: The implementation of non-cash payment scheme
(Scheme 291), the State Bank and relevant Ministries and Agencies
have focused on building and deploying some positive contents, the
seasible and short term partial scheme, meeting the urgent demands of
reality, especially: a scheme for construction of unified card switching
center; scheme of salary payment through account; Scheme for
completion and development of the interbank payment system.
Fourthly: Many modern methods and services of commercial
business payment was researched and improved, contributing to the
diversification of the products and services, meeting the growing needs of
the economy and people.
Limitations and reasons
a/ Limitations and difficulties
Firstly: The effect of payment activity management can pay is
not high in the overall targets including: non-cash payment in Vietnam
has now started to develop, not commensurated with the available
infrastructure and practical requirements; cash is still widely used, the
amount of cash in circulation has continued to rise; most payment
transactions of residential areas are still in cash. Compared with other

countries, Vietnam is among the countries, which still use many cash.
There are many difficulties in development process of commercial
business payment.
Secondly: One of the difficulties in the operation of inter-bank
electronic payment system (this is the most important payment
system)
Thirdly: The risk management in payment is not very good. The
ratio of credit assets to pay immediately and liabilities to pay
immediately limited (low solvency).

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Fourthly: The State Bank does not have an effective solution and
coordination with relevant agencies in the management of electronic
payment existing in the market (not payment through bank), so
currently there are acts of computer networks, telecommunications,
internet with digital devices in the form of multi-level marketing
payment; 24h Online Purchase Traning Joint Stock Company (MB24)
has opened branches in many places, to cheat eassets of many
people.
Fifthly: On the implementation of payment activity schemes, the
awareness of cost savings has not been adequate attention
b/Reasons
Firstly: Macroeconomic policies on the management of payment
activities have changed but not been the basics; so far there is no
Payment Act to regulate activities instead of decrees, decisions with
the short-term direction and management, while the licensing for
commercial banks to operate on the last years of first decades (21st
century) is too easy.
Secondly: The technical infrastructure of the banks in general are
not developed synchronizily; there are many gaps in infrastructure for

equipment between banks, the environment is not compatible, there
are problems in the connection between banks; IT application level of
the banks is still low.
Thirdly: For card products, there is no solution for unified
engineering systems management, from national to local level,
software, hardware between banks are not compatible. The lack of
synchronization in technical systems, each bank applies a different
standard, therefore in order to connect cards, it is difficult for
contractors to make connections in the country. This also causes the
current card acceptance network is divided, subjects can not have the
immediate payment at any time, any place. The problem above is
along with the card's utility.
Fourthly: the telecommunications infrastructure has limited, and
potential risks for security and safety, have not kept pace with the

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development of the user; collaboration between service providers and
banks has met the differences in management systems, database
between banks and companies providing services. Service providers
(electricity, telecommunications, companies accepting card such as
supermarkets, hotels, restaurants, etc.) are not ready to cooperate with
the card payment.
Fifthly: Released from centralized planning mechanism -
subsidies, economic backwardness, payment backwwardness, for a
long time, the level of leadership and labor resources have limited for
understanding of the administration and enforcement of the payment
mechanism in market economy and new and modern technology.
Sixthly: Development, adjustment, and issuance of bank’s legal
documents have not kept up with the demands of the application and
development of IT.

Seventhly: The coordination of relevant agencies and
organizations have not closed and synchronous, not creating all the
necessary conditions and preconditions for the development of
commercial business payment. Methods, organizational measures,
operation, control, supervision, management, learn from experience,
etc are limited and inadequate.
Eighthly: Habits, psychology of using cash on the part of
agencies, organizations and the majority of individuals also are
popular; some factors are problems, limitation of using commercial
business payment as: commercial civilization, psychological problems
afraid of accessing to new technology, disclosing income, revenue,
cash use for the non-transparent purposes, etc
Ninethly: Implementation and organization of inter-bank
electronic payment is the modern payment method, mainly having a
major effect on economic activity, but the number of participants is
not high. There are 64 /97 the system focal points and 786 direct
members (branches). There is no focal point widely in payment for
securities activities; payment activities of the State Treasury System
are inappropriate.

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CHAPTER 3: SOLUTIONS AND RECOMMENDATIONS FOR
COMPLETION OF MECHANISM AND MANAGEMENT
ORGANIZATION OF PAYMENT ACTIVITY THROUGH
PAYMENT SERVICE PROVIDERS IN VIETNAM

After determining the achievement obtained of payment
activities and especially when determining limitations existing in
recent years, along with the study of goals, orientation and
perspectives of development of non-cash payment until 2020, the

study gives solutions in order to improve the management for payment
service providers in Vietnam. The solutions can be classified into 4
groups:
Group 1
: General solutions (important): the development of
modern, Sync, and reasonable information technology: Content of
presented and analyzed including:
- Development of the information technology industry for many
years has been associated with the development of banks and payment
activities.
- The role of information technology to the Bank in general and
to payment activity in particular
- Development of information technology is modern,
synchronous, and logical
Group 2
: The solution of organization and management
mechanisms for payment activities
1/ Modernization of the management of payment acitivity by
effective policy mechanisms
2/ Development of Payment Law - mitigating the management
role of the State Bank, increasing the inspection role of competent
authorities
3/ For the long term, management of payment activities should
establish the payment association and decentralization for Payment
Association
4/ The strong development of inter-bank electronic payment
system (national payment system) to become the provider of
information and tools for the operation of monetary policy
5/ Rapid and effective deployment of construction project for
unified card switching center

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6/ Policies of tax and fees with a huge impact on development of
commercial business payment in the population
7/ Research and supplement of forms, reasonable fees in the
direction of reduction of high value fee, agreed on a common fee for
transactions in the province and with other provinces in order to
overcome the division of high value cash items into low-value items,
increasing work pressure at branches of State Bank
8/ Implementation of the management focused on units with the
power; minimize the management distribution with the less impact
9/ Further improvement of the legal framework in accordance
with the operation of payment and the development of information
technology.
Group 3
: organizational solutions of payment activities
through payment service providers.
1/ Payment service providers should confirm that payment
activity is an important business activity of commercial banks.
2/ Improvement of payment technology innovation, technical
systems, information of commercial banks
3/ Further development of payment methods.
4/ Good process of card payment
5/ Promotion of commercial business payment in the public
sector, business and people
Group 4:
General solutions
- Development of methods and services of modern non-cash
payment in the direction: increase quantity, quality and types of
payment products and services with high reliability and reasonable

price; research and focus on developing products and services with
high intelligence and high technology, suitable with the development
of information technology; build business processes, promote the
application of information technology in payment; apply open and
easy to use softwares in the country; develop common standards
suitable with international practices.
- Network development accepting non-cash payment methods
- Solutions of organizational structure
- Improvement of human resources to develop non-cash payment
- Banking sector should implement the policy of bank
restructuring soon

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Finally, the study chooses to make a number of
recommendations in order to create conditions for the development of
commercial business payment:
+ Proposing Ministry of Information, media and press to promote
the dissemination of knowledge about commercial business payment.
+ Proposing the State Bank to complete the legal basis related to
the payment. Strengthening the modernization of the application of
payment technology based on modern information technology;
deploying rapidly and effectively the construction project of unified
card switching center. Promulgating standards of service discipline,
etc.; improving powers for the Payment Department.
+ Proposals to the Government: Government proposals to
strengthen direct ministries, branches, localities and coordinate with
the banking industry to implement synchronization, rhythm and more
effective tasks have been defined in order to implement the objectives
and directionout.

CONCLUSION

The author has attempted to present and analyze the formation
and development of payment activity; clarify the concept, the role of
payment and management mechanisms of payment activity, solutions
and methods of payment in the country with the factors affecting the
payment activity and management mechanism of payment activity
through payment service providers.
Based on the arguments of payment and management mechanism
of payment activity, assess the situation of mechanisms and
organization of payment activity through payment service providers in
Vietnam; give comments on the results, limitations and problems,
identify the reasons
Since then offer solutions and recommendations in order to
improve mechanisms and organization of payment activity
management through payment service providers in Vietnam.
However, this is a big and complex problem, but with limited
understanding, inevitable limitations I am looking forward to
scientists and Board’s sympathy, giving opinions and suggestions for
a more complete thesis.