In the context of rapid transformation in the financial and banking sector, expanding access to banking services—especially in rural, remote, and underserved areas—has become an urgent requirement. For the Co-operative Bank of Vietnam (Co-opBank) and the People’s Credit Fund (PCF) system, this practical demand has led to a new direction through the payment agent model, which was officially legalized by the State Bank of Vietnam (SBV) in 2024.
With the legal framework for payment agents in place, Co-opBank can expand its capacity to provide financial services to areas that lack, or have limited access to, banking transaction points
A Legal Framework That “Paves the Way” for Payment Agents
Circular 07/2024/TT-NHNN issued by the SBV officially took effect on July 1, 2024, thereby formally recognizing payment agent activities within the Vietnamese banking system. According to this regulation, PCFs are allowed to act as payment agents for Co-opBank in relation to their own members and customers.
With the legal foundation established by Circular 07/2024/TT-NHNN, Co-opBank is authorized to delegate payment agent activities to PCFs, enabling the expansion of financial services to areas where banking transaction points are lacking or nonexistent.
Once implemented, the payment agent model not only allows Co-opBank to broaden its financial service reach but also empowers PCFs to enhance their role and operational capacity within their local communities. Under this model, PCFs can perform several key banking functions under Co-opBank’s authorization, including: payment account services, card services, and other payment-related services.
The deployment of payment agents at PCFs also helps reduce the burden on Co-opBank’s branch network while delivering direct benefits to customers, especially in rural areas where commercial banking services remain limited..
Diverse Benefits of the Payment Agent Model
The payment agent model offers significant advantages for customers, the PCF system, and Co-opBank across various aspects:
Convenient Access to Banking Services – Previously, customers in remote and rural areas often faced difficulties in accessing financial services due to geographical distance and the limited number of bank transaction points. However, with the implementation of payment agents at PCFs, local residents can now access banking services right in their communities, without the need to travel long distances to bank branches. This not only helps save time and transportation costs but also enhances access to formal financial services, contributing to financial inclusion in line with the Government and the SBV’s strategic objectives.
The implementation of the payment agent model will enable PCFs to gradually access and synchronously deploy digital banking services right within their local communities
Enhancing Operational Efficiency – For the PCF system, the payment agent model opens up opportunities to improve operational efficiency and generate additional income from service fees. By being authorized to carry out certain payment agent services on behalf of Co-opBank, PCFs can expand their service offerings to customers, thereby diversifying their business activities without the need for significant investments in infrastructure or human resources. This helps PCFs not only strengthen their financial capacity but also reinforce their role within their local communities, while contributing to system safety and the sustainability of operations.
Synchronized Deployment of Digital Banking Services – In the context of the financial and banking sector accelerating its technological adoption, implementing the payment agent model enables PCFs to gradually access and roll out digital banking services in a synchronized manner at the local level. This not only supports their integration into broader industry trends but also enhances service quality and better meets customer needs in the digital era.
Operational Optimization – For Co-opBank, deploying the payment agent model through PCFs allows the bank to optimize operations and save costs associated with expanding its physical branch network. Instead of investing in new transaction points, Co-opBank can leverage the existing PCF network to expand service coverage, thereby strengthening its presence in rural, remote, and underserved areas.
Overall, the payment agent model not only strengthens the connection between Co-opBank and PCFs but also delivers tangible value to customers and communities. It is regarded as an optimal solution for advancing a comprehensive financial system, ensuring that all citizens have access to banking services that are safe, convenient, and efficient.
The payment agent model is a practical solution for improving financial operations, increasing access to banking services in rural areas, and fostering the sustainable development of the PCF system.
With a clear legal foundation provided by Circular 07/2024/TT-NHNN, the close collaboration between Co-opBank and PCFs will usher in a new phase of development—contributing to greater financial inclusion and delivering real benefits to customers and PCF members.
Ngoc An – Card & Digital Banking Services Center, Co-opBank
