Significant Drop in Fraud Cases Due to Biometric Authentication in Vietnam

Since the implementation of mandatory biometric authentication on July 1, 2024, Vietnam has seen a remarkable 72% decrease in fraud-related bank accounts, leaving only 682 accounts identified as fraudulent. Additionally, the frequency of fraud incidents tied to money transfers has decreased by 50%, with 700 reported cases since the start of July.

During a press conference on September 26, Pham Anh Tuan, the Director of the Payment Department at the State Bank of Vietnam (SBV), revealed that by mid-September 2024, biometric data had been collected for around 38 million bank accounts, which includes nearly 4 million e-wallets.

Tuan pointed out that most customers making large transactions—over 10 million VND per transaction, or exceeding 20 million VND in total daily transactions—have complied with the requirements set by SBV’s Decision 2345 by registering their biometric data.

He highlighted, “Decision 2345 aims to ensure that accounts are correctly authenticated and are registered under the rightful account holders, whether they use bank accounts, cards, or e-wallets. This is crucial for preventing fraudulent use of accounts that may be rented, bought, or borrowed.”

Since the policy was enacted, daily transaction numbers have remained consistent at over 25 million, similar to pre-July 1 figures.

Tuan remarked, “The effectiveness of Decision 2345 is clear, with fraud incidents decreasing to 700, a 50% drop, and the number of fraud-related accounts falling to just 682, which is a 72% reduction.” This indicates a significant positive influence in combating payment fraud.

Tuan expressed optimism that payment service providers will persist in collecting biometric data and verifying it against the biometric information stored in citizens’ chip-based identity cards (CCCDs). These practices are in line with SBV regulations as outlined in Circular 17 (on account operations), Circular 18 (on card services), and Circular 40 (on intermediary payment processes).

Starting January 1, 2025, individuals who have not had their biometric data collected by financial institutions or intermediaries will be limited to making money transfers only in-person at bank counters.

“As this deadline approaches, financial institutions and payment intermediaries are urgently working to ensure compliance,” Tuan noted.

In October, the SBV plans to introduce a new circular to supersede Circular 35, which currently regulates the security of online transactions. This update aims to enhance the legal framework supporting Decision 2345 within Vietnam.

While Tuan clarified that not every transaction necessitates biometric authentication, having this feature in place enhances the overall verification process, assuring that those using electronic payment services are indeed the legitimate account holders.

“We encourage customers to initiate biometric authentication checks at any time to safeguard their rights and deter fraud in financial transactions,” Tuan concluded.