Scenario: a major e-wallet launches “pay later”: users get a VND 20 million limit for shopping on a partner marketplace, instalments without a credit card. The State Bank of Vietnam asks: may an e-wallet extend credit, and what licences does this model need?
The principle: only credit institutions may lend
The Law on Credit Institutions 32/2024/QH15 (effective 1 July 2024) reserves banking operations — including credit extension — to licensed credit institutions. E-wallets are legally payment intermediary services (also conditional, licensed by the State Bank) — but an intermediary licence does not include lending rights. An e-wallet lending to users for shopping without being a credit institution conducts unauthorised banking, risking administrative fines in the monetary and banking sector and forced termination.
The accepted partnership model: fintech plus credit institution
The market runs a three-party partnership: the e-wallet or marketplace supplies technology, customer access and preliminary credit scoring; a licensed credit institution (bank, licensed consumer-finance company) is the named lender — appraising, disbursing and bearing compliance responsibility for lending, interest and reporting. Here the credit contract is signed between the consumer and the credit institution; the e-wallet is merely a distribution channel. Prerequisites: the partner credit institution must hold an operating licence, and the partnership must transparently disclose the real lender, interest and fees to consumers — hiding the lender’s identity to suggest “the wallet lends” breaches transparency duties.
What consumers should know
Before using pay-later wallets, verify three things: first, the named lender in the contract is a licensed credit institution (check the State Bank’s portal); second, the total credit cost (interest plus all fees) and late-payment computation; third, whether your credit data goes to the CIC. Complaints about pay-later wallets: first to the service providers (e-wallet, credit institution) via complaint mechanisms; if unresolved, to the State Bank (for banking-supervised matters) or the courts.
Frequently asked questions
Is an e-wallet “advancing” shopping money considered lending?
It depends on substance. Where the wallet advances funds repayable with charges or interest, that is credit extension reserved to credit institutions. Where it merely routes the user’s own wallet or account funds, it remains payment intermediation.
Can foreign fintechs offer pay-later in Vietnam?
The same principle applies: lending in Vietnam needs a locally licensed credit institution as named lender. Foreign fintechs may only join technologically, partnering with domestic credit institutions.
Does the 20%-per-year cap apply to pay-later rates?
The 2015 Civil Code’s 20% cap governs civil lending; credit institutions’ lending follows the Law on Credit Institutions and State Bank interest rules. Consumers should look at total cost, not just the advertised “rate”.