VIMO targets illegal mobile wallet payments in Vietnam

FinTech Innovation editors
30 May 2018
00:00
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Daily News

The Vietnam National Administration of Tourism noted that from January to April 2018, 1.8 million Chinese tourists visited the country, 32% of total international arrivals. With Chinese travelers so accustomed to using e-wallets, it is easy to understand why some retailers would be tempted to set up similar point of sale (POS) counters that support the popular QR Code.

Stories of certain Chinese-owned shops in Vietnam using unauthorized Chinese-issued payment POS (point-of-sale) machines to accept Chinese card and QR-code payment from Chinese tourists traveling to Vietnam have been highlighted by Vietnamese media recently, raising concerns about unauthorized foreign currency payment and tax losses involving visiting Chinese tourists.

For example, by mid-May in Ha Long city on the shores of famed Ha Long Bay, local authorities have discovered over 200,000 RMB paid through Chinese-issued POS payment machines without going through local banking system or payment intermediaries in Vietnam.

"Recently, there have been a number of Chinese-owned businesses using POS payment machines or e-wallets issued in China to receive RMB payment from Chinese tourists while trading in the territory of Vietnam. This is a serious breach of Vietnam Laws. Due to prices listed and payment accepted in foreign currency in the territory of Vietnam, it has caused direct money flows from buyers' bank cards or e-wallets to that of the sellers in the China territory only without flowing into Vietnam, and has resulted in unmanageable transactions as well as tax losses," said VIMO CEO Do Cong Dien.

VIMO is now the first and only licensed payment intermediary in partnership with both WeChat Pay and Alipay without equity capital involved. This has grown acceptance of legal cross-border electronic payments through e-wallets for Chinese and South Korean tourists when they travel to and make payments at local stores in Vietnam, for which VIMO has reported and submitted dossier to the State Bank of Vietnam.

Accordingly, when a tourist uses a foreign e-wallet application to pay at local Vietnamese stores, VIMO requests the foreign e-wallet company to deduct the payment amount from tourist's account, then credit into VIMO e-wallet of the Vietnamese vendor in Vietnam Dong (VND), in accordance with applicable laws and regulations. When the reconciliation period comes around, the foreign e-wallet company will transfer the outstanding balance to VIMO's bank in Vietnam, bringing about significant source of foreign currency to the country.

Emphasizing the need for Cross-Border E-Payment, Dien highlighted that VIMO has been contributing 30-50% increase in turnover for Vietnamese businesses thanks to its convenient e-payment methods, which also stimulate consumption among foreign tourists as they no longer need to carry so much cash, but just the handy mobile phone.

He also advised Chinese tourists visiting Vietnam to only pay at local stores accepting legal WeChat Pay and Alipay issued by VIMO to stay safe and avoid unnecessary trouble with local authorities similar to recent cases in Ha Long Bay.

First published in Fintech Innovation

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