Vietnam’s central bank proposes 49% cap on foreign ownership in e-payments

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State Bank of Vietnam, the country’s central bank, has proposed a 49 per cent cap on foreign ownership in local e-payment companies.

Currently, there are no restrictions on foreign ownership of e-payment companies in the country.

In its latest draft for a regulation that would replace an old decree on cashless payments, SBV said: “The proposed ruling is aimed at encouraging overseas investments while assuring no manipulation by foreign investors in the sector.”

SBV had previously proposed a 30 per cent limit on foreign ownership in e-payment companies. That proposal was met with opposition from local fintech companies and had prompted a reevaluation by the central bank.

“Creating an environment benefiting local businesses is a real need,” SBV stated in its latest draft. The Vietnamese central bank also pointed to a similar regulation in Indonesia where the financial services watchdog has imposed a 49 per cent cap on foreign holding in e-money services.

SBV is now seeking recommendations from industry players before submitting the draft to the Prime Minister. The regulation, if approved, will not be implemented retroactively. Therefore, e-payment companies that have obtained a licence in Vietnam will not have to adhere to the new regulation.

Licences have been given to 31 digital payment companies, including cash-rich firms M-Service (the operator of e-wallet MoMo), VNPAY and Grab‘s affiliate Moca.

The five largest e-payment companies in the country, which together account for 90 per cent of the market, are owned anywhere between 30 per cent and 90 per cent by overseas investors, according to SBV.

In 2016, Japan’s NTT Data took over VietUnion Online Services Corporation to turn the latter into its subsidiary.

More recently, VNPAY raised around $300 million from SoftBank Vision Fund and GIC, while MoMo is backed by Goldman Sachs, Standard Chartered Private Equity and Warburg Pincus.

Local newswire VnExpress reported that foreign shareholders owned 66 per cent in MoMo. The company declined to comment on the report.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.