The State Bank of Vietnam (SBV) has announced it would remove regulations limiting foreign ownership in local intermediary payment firms from its draft Decree No 101.

A customer pays using the Momo e-wallet at a convenient store in HCM City.
(Photo courtesy of Momo) 

Last November, the SBV announced the draft decree on the management of non-cash payments and set a foreign ownership limit of 49 percent in intermediary payment firms.

Many fintech firms expressed concern over the regulation, as foreign investors have not only made great contributions in terms of investment but also in technology and know-how.

Three months later, on the SBV’s website, the central bank said the removal was based on the consideration that foreign investment played an important role in the development of local firms.

The SBV thought the restriction may affect the attraction of foreign investment capital to local firms and the fintech sector.

In addition, there are a number of big firms with foreign investor equity ratio of more than 49 percent and the change in the rate could affect their activities, said the website.

Nghiem Thanh Son, Deputy Head of the SBV’s Payment Department, said by the end of Q1, Vietnam was home to 27 e-wallets, including five big ones with more than 90 percent market share. Foreign ownership in the five firms accounted for between 30 and 90 percent.

For example, the foreign ownership in Di Dong Truc Tuyen Services Joint Stock Company operating MoMo, the biggest e-wallet in the country, was 66 percent, according to data from the Ministry of Planning and Investment.

The SBV said the removal would also help make finance more inclusive for those not yet bankable, especially in remote areas. At the same time, the development of intermediary firms has helped banks reach customers without having to expand their network of branches and offices, saving costs and improving business efficiency.