Ngo Van Duc, deputy director of Payment Method Supervision at the State Bank of Vietnam, said there was no law or regulation on the management of fintech businesses and their services.
The development of fintech businesses had not met expectations in recent years, he said.
According to the SBV, there are now about 150 active fintech firms – most of which focus on payment methods – and 30 companies that are licensed by SBV and operate as payment middlemen.
Fintech businesses are also in other fields such as bank lending, electronic confirmation, blockchain applications and individual financial services.
Therefore, a fintech law must be provided to protect the rights and benefits of both service suppliers and customers, Duc added.
Fintech helped ease financial and monetary transactions, making them more convenient, more accurate and faster. But it also means fintech firms may find opportunities to carry out illegal activities.
Regulations often tighten the operation of fintech firms, not foster the conditions for them to function, said lawyer Phung Anh Tuan, deputy chairman and general secretary of the Vietnam Association of Financial Investors (VAFI).
Two decrees were issued by the Government in July 2016 and February 2019 to replace Decree 101/2012/ND-CP regulating cashless payment. The two decrees cap the limit of foreign ownership in local fintech firms at 30 per cent of 49 per cent.
Meanwhile, maximum purchase of a personal e-wallet is VND20 million each day and VND100 million each month while that of an institutional e-wallet is VND100 million each day and VND500 million each month. Each person can only use one e-wallet provided by the fintech firm.
“Fintech companies need foreign capital to develop further, invest more in technology, marketing and human resources. The limit of foreign capital inflow may hinder their growth,” Tuan said.
SBV official Duc said the central bank had almost completed the policy on piloting a regulatory sandbox – in which government agencies and businesses are free to experiment with new ideas – and it would submit the plan to the Prime Minister for approval.
The policy aimed to create a suitable environment for businesses to test their products and services and meet market demand, he said.
In 2019-20, the central bank would continue improving its payment-related policies, especially electronic payment, and create a test management mechanism for fintech firms after its regulatory sandbox policy was passed.