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.
