Trang 1 THUONG MAI UNIVERSITYFACULTY OF FINANCIAL AND BANKINGDISCUSSIONINTERNATIONAL PAYMENTAND EXPORT-IMPORT FINANCINGTOPICInternational payment service for corporate customers at Joint
Topic: International payment service for corporate customers at Joint Stock
THEORETICAL BASIS 4
International payment means the performance of payment obligations due to economic and non-economic activities between counterparties in different countries
International payments are not only governed by national laws but also by international laws, conventions, customs, and practices
International payments are influenced by the variation in exchange rates and foreign exchange reserves.
International payment transactions are mainly done through commercial banking systems.
International payment is a type of banking service.
International payments play a crucial role in enhancing foreign economic relations and bolstering each country's position in the global market They act as a vital link between nations, facilitating smoother interactions For import-export businesses, these payments are essential for settling transactions related to goods and services, ensuring seamless international trade.
For commercial banks: International payments create service revenue, promoting other development banking activities.
2.4 The legal framework of International payment
International conventions are legally binding agreements between countries, addressing various fields such as trade, science, crime, disarmament, transport, and human rights Notable examples include the United Nations Convention on Contracts for the International Sale of Goods (Wien Convention 1980) and the Convention Providing a Uniform Law for Bills of Exchange and Promissory Notes (Geneva, 1930).
National law refers to the authoritative set of regulations established by a sovereign state's government, which applies uniformly across its regions and territories This legal framework encompasses various branches, including civil law, commercial law, and foreign exchange law, ensuring consistent governance and legal standards within the nation.
International customs and practices in payments encompass the established norms and procedures that regulate financial transactions between parties in different countries, ensuring secure and efficient cross-border trade Key examples include the Uniform Customs and Practice for Documentary Credits and the Uniform Rules for Collection, which facilitate seamless international financial dealings.
Documents for international payment come in two types: "financial documents" and
Commercial documents are essential written records that detail various aspects of commercial transactions, encompassing items such as orders, invoices, shipping documents, transport papers, and certificates of origin These documents can be categorized into two primary types, highlighting their significance in facilitating and documenting business activities.
- Transport documents: for example, Multimodal Bill of Lading Ocean, Bill of Lading - B/L, Airway Bill, and Railway Bill
A commercial invoice is a crucial document issued by the seller to the buyer, serving as a bill that outlines the transaction details It must be created in accordance with the contractual agreement and may include essential documents such as the insurance certificate, packing list, and Certificate of Origin (C/O).
"Financial documents" means bills of exchange, promissory notes, cheques, or other similar instruments used for obtaining the payment of money
A bill of exchange is a financial instrument defined by the Law on Negotiable Instruments, where the drawer requests the drawee to make an unconditional payment of a specified amount either on demand or at a predetermined future date to the designated beneficiary.
Process of using a bill of exchange:
A cheque is a written order issued by the drawer to the drawee, typically a bank, instructing the drawee to pay a specified amount either to the drawer or to a designated third party upon demand The process of using a cheque involves the drawer writing the cheque, presenting it to the drawee for payment, and ensuring that the funds are available for the transaction.
A promissory note is a written, unconditional promise made by one individual to another, wherein the maker agrees to pay a specific amount of money either on demand or at a predetermined future date This legal document is signed by the maker and can be payable to a designated individual, to their order, or to the bearer.
Process of using promissory note:
International payments involve various terms and conditions that are negotiated between parties involved in a transaction These terms help define the currency, timing, location, and method of payment.
This classification is carried out based on the convertibility of currencies According to this method, there are three ways to classify currency
- Classification of Currencies based on their strengths and weaknesses
A weak currency is characterized by a lower exchange rate compared to other currencies, often leading to depreciation and limited acceptance in global markets In contrast, a strong currency boasts a higher exchange rate value, indicating stability and widespread acceptance in international trade.
- Classification of Currencies Based on Scope of Use:
World currencies play a crucial role in international trade and finance, as they are not linked to any specific country Historically, gold has been recognized as a universal currency due to its inherent value and widespread acceptance across borders.
+ International Currency: International currencies are used in international transactions but are associated with specific countries or organizations Examples: Special Drawing Rights (SDR), Euro (EUR), …
+ National Currency: National currencies are issued and regulated by individual countries and are primarily used within the borders of that country Examples: The US Dollar (USD), Vietnamese Dong (VND), …
- Classification of Currencies Based on the Form of Existence:
+ Cash: Cash refers to physical forms of money, such as banknotes and coins, that are tangible and can be used for transactions in the traditional sense.
Credit money refers to funds that exist as digital records or bookkeeping entries within the banking system This type of money encompasses bank account deposits, which are utilized for electronic transactions.
Electronic money, commonly referred to as e-money, is a digital currency that exists solely in electronic form This includes various types of cryptocurrencies, such as Bitcoin, as well as digital wallets and other digital payment methods.
Term of time of payment:
The timing of payment in international trade is crucial, as it involves various risks that create uncertainty between exporters (sellers) and importers (buyers) There are three primary types of payment timing to consider, each impacting the transaction dynamics.
Advance payment: There are two types of advance payments that are "Cash with order (CWO)" and "Remittance in advance" Payment in advance is used in minimal circumstances.
Payment methods in international trade include various options: "At sight" payments involve transactions against a documentary bill issued by a sight letter of credit (L/C) In contrast, "Document against Payment" requires payment to be made upon the delivery of specified documents Additionally, "Cash on Delivery" (COD) entails payment upon the delivery of goods, accompanied by a delivery order or warehouse warranty.
International payment service for corporate customers at Joint Stock Commercial
3.1 Introduction of The Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV)
The Joint Stock Commercial Bank for Investment and Development of Vietnam is commonly known as BIDV.
BIDV, a prominent investment bank in Vietnam, boasts a rich history and a strong reputation It provides a comprehensive array of financial services, including lending, deposits, credit cards, and electronic services, catering to both individual and corporate clients As of June 30, 2023, BIDV maintained its status as the largest commercial joint-stock bank in Vietnam, with total assets amounting to 2.1 quadrillion Vietnamese dong.
BIDV boasts a robust network of nearly 1,100 branches and transaction offices, alongside a commercial footprint in six countries and territories, catering to over 12 million customers The bank has forged partnerships with 2,300 financial institutions globally, enhancing its international presence and service capabilities.
On April 26, 1957, the Vietnam Construction Bank was established, marking the beginning of the Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV) The development of BIDV reflects a proud and challenging journey, closely linked to Vietnam's historical periods of national safeguarding and growth.
The history of the Joint Stock Commercial Bank for Investment and Development of Vietnam has seen four name changes, aligning with different periods of nation- building and development:
From 1957 to 1981: Vietnam Construction Bank
From 1957 to 1981, the Vietnam Construction Bank operated under the Ministry of Finance, focusing on allocating state budget funds for essential construction projects as directed by the government Its role was pivotal in supporting the socialist development in the North and facilitating the liberation of the South for national reunification.
From 1981 to 1990: Vietnam Investment and Construction Bank
The "Vietnam Investment and Construction Bank" period was marked by a dynamic phase in the country's history when it was preparing for and implementing reforms (1981
- 1990) The bank successfully fulfilled its core mission of supporting the economy as the nation transitioned towards a market-oriented economic model.
From 1990 to 2012: Vietnam Investment and Development Bank
The "Vietnam Investment and Development Bank" era coincided with BIDV's transformation from a specialized bank to a full-fledged commercial bank, adhering to market principles and the country's opening-up direction.
From 2012 to the present: Joint Stock Commercial Bank for Investment and Development of Vietnam
BIDV's transition to a Joint Stock Commercial Bank marked a pivotal moment in its development, signifying a major transformation in its structure, ownership, and operational methods This change enabled BIDV to fully embrace market principles, enhancing its focus on international integration and competition.
(Source: From BIDV’s 2022 annual report )
(Source: From BIDV’s 2022 annual report )
(Source: From BIDV’s 2022 annual report )
3.1.3 Overview of BIDV’s financial situation from 2020-2022
Table of the operational results of BIDV Bank for the period from 2020 to 2022
Total credits and investments VND1,44 quadrillion VND1,68 quadrillion VND 1,99 quadrillion
Consolidated outstanding loans VND1,23 quadrillion VND1,37 quadrillion VND1,54 quadrillion
Total mobilized capital VND1,4 quadrillion VND1,64 quadrillion VND 1,97 quadrillion
Consolidated difference in revenues and expenses
VND32,4 trillion VND43,1 trillion VND47,1 trillion
Consolidated profit before tax VND9,1 trillion VND13,5 trillion VND 23 trillion Total revenues VND124,7 trillion VND125,7 trillion VND146 trillion
Market capitalization VND193 trillion VND187,7 trillion VND193,5 trillion
( Source: from BIDV’s annual report )
In 2020, BIDV demonstrated resilience amid the challenges posed by the COVID-19 pandemic, maintaining safe operations and achieving growth aligned with market and economic developments The bank successfully fulfilled its 2020 business plan as outlined by the General Meeting of Shareholders, meeting its obligations to the State budget while preserving and enhancing the State’s capital.
BIDV is committed to upholding the rights of its shareholders and employees while also demonstrating strong corporate social responsibility The bank has actively contributed to community support by reducing its income by over VND 6.4 trillion to assist individuals and businesses impacted by natural disasters and the pandemic.
As of December 31, 2020, BIDV reported total assets of VND 1.52 quadrillion, with outstanding loans and investments amounting to VND 1.44 quadrillion, including a loan balance of VND 1.23 quadrillion The bank's mobilized capital effectively met demand, resulting in total customer deposits of VND 1.4 quadrillion, primarily from organizations and individuals totaling VND 1.3 quadrillion In 2020, BIDV achieved a market capitalization of VND 193 trillion, securing the 5th position in Vietnam's stock market, while its shares experienced a 56% increase since March 2020 and a 4% rise since the start of the year.
BIDV has successfully issued over VND 23.7 trillion in bonds to bolster its capital, achieving a planned interest rate reduction of 0.94% annually In 2020, demand deposits surged by 14.9% compared to the previous year, with the average ratio of demand deposits to total deposits reaching 14.5% This shift towards sustainability in deposit structure reflects BIDV's commitment to enhancing financial stability and growth.
As of December 31, 2020, BIDV successfully maintained its non-performing loan (NPL) ratio at 1.54%, in accordance with Circular 02/2013/TT-NHNN, meeting the targets set by the General Meeting of Shareholders for the year Additionally, the Group 2 debt ratio stood at 1.58%, reflecting a decrease compared to the end of 2019.
In 2020, the total operating net income reached VND 50.037 billion, with net profit from services increasing by 23.4% to VND 5.3 trillion, representing 10.5% of total net income Additionally, net profit from forex trading was VND 1.7 trillion, contributing to a rise in non-credit service income's share of total net income from 8.9% in 2019 to 10.5% in 2020 Despite exceeding the State Bank's assigned plan, profit before tax fell by 15.9% compared to the previous year, totaling VND 9.1 trillion.
In 2021, BIDV demonstrated resilience amid the Covid-19 pandemic by maintaining safe operations and exceeding business targets set by the General Meeting of Shareholders The bank effectively preserved and developed state capital while safeguarding the rights of shareholders and employees Additionally, as a prominent state-owned commercial bank, BIDV contributed VND 7.9 trillion to support customers impacted by COVID-19 through measures such as debt restructuring, interest rate reductions, and waived transaction fees via e-banking.
As of December 31, 2021, total assets amounted to VND 1.76 quadrillion, with total mobilized capital reaching VND 1.61 quadrillion, effectively meeting capital demand and ensuring system liquidity Deposits from entities and individuals contributed VND 1.5 quadrillion to this total Additionally, total outstanding loans and investments increased by 16.6% compared to 2020, reaching VND 1.67 quadrillion The market capitalization stood at VND 187.2 trillion, making it the sixth largest in the Vietnamese stock market.
The deposit structure showed significant improvement, leading to capital cost savings, with average demand deposits rising by 32% from 2020 and the demand deposits ratio to total deposits reaching an average of 16.8%, up over 2% from the previous year Additionally, mobilized capital in USD surged by 35% compared to 2020, marking the highest level in five years In 2021, BIDV successfully raised VND 20.9 trillion through bond issuance to bolster its capital.
The loan structure has increasingly emphasized sustainability by prioritizing lending to retail customers, small and medium-sized enterprises (SMEs), and foreign direct investment (FDI) enterprises, thereby reducing reliance on large corporate clients By December 31, 2021, retail loans surged by 25% compared to 2020, representing 40% of total outstanding loans, while SME and FDI loans rose by 15% and 21%, respectively.
Cross-border payment 21
BIDV provides customers with payment services for cross-border trade with Chinese partners in CNY or VND with the most competitive exchange rates.
For import payments: Upon receiving and checking documents presented by the customer, BIDV shall make payments to the exporter through Chinese banks via internet banking, bill of exchange…
For export payments: BIDV shall make credit to the customer's account after receiving remittance from Chinese banks.
3.2.1.1.4 Fees for cross-border payment
CATEGORIES APPLIED FEES AND/OR CHARGES (excluding
TRANSACTION IN VND TRANSACTION IN
FOREIGN CURRENCY Cross-border Payment
Export Payment Free of charge Free of charge
(Data sources are extracted from banks' websites)
Import payment 22
BIDV provides importers with fast and secured international payment services, including:
A Letter of Credit (L/C) is a financial instrument wherein the issuing bank, at the request of the importer (applicant), guarantees payment to the exporter (beneficiary) for a specified amount, provided the beneficiary submits documents that comply with the terms outlined in the L/C.
- BIDV provides the following service regarding Import LC:
+ Delivery authorization/Bill of lading endorsement/Delivery guarantee
Documentary collections is a payment method where the exporter empowers the bank to collect payment from the importer based on shipping documents The bank releases these documents to the importer only upon payment or acceptance of the Bill of Exchange, ensuring that the importer can obtain the goods only after fulfilling their financial obligation.
Upon receiving collection documents from international banks, BIDV will notify the customer (importer) to either make the payment or agree to pay the Bill of Exchange at maturity, after which the documents will be provided for the customer to collect their goods.
- Types of collection BIDV provides:
D/P (Documentary against Payment): The bank hands over the documents to the importer only when the importer makes payment.
D/A (Documentary against Acceptance): The bank hands over the documents to the importer only when the importer accepts to pay the Bill of exchange at maturity.
Outward remittance: This service allows importers to pay via telegraphic transfer in various currencies with simplified documentation and fast procedure.
Fast and secure transactions through BIDV's worldwide network.
Consultancy for customers regarding the contract terms, L/C terms, and forms of payments to ensure the most benefits for their customers.
Import financing is provided in various forms.
Ordinal numbers TYPES OF FEE CHARGES
1.1 Issuance of Letter of Credit Minimum 50 USD.
The value of the Letter of Credit collateralized by funds (VND/foreign currency) on the non-term deposit account/Reserve account at BIDV (non-credit limit specified deposit account).
0.05% of the corresponding value, up to a maximum of 500 USD.
The value of the Letter of Credit is secured for payment through the collateralization of a deposit contract/savings card/certificate of deposit.
0.06% of the corresponding value, up to a maximum of 500 USD.
The value of the Letter of Credit is exempt from collateral or is secured by alternative means (other than the forms mentioned above).
1.5% per annum of the corresponding value, from the date of issuance to the expiration date of the Letter of Credit. 1.2 Amendment to the Letter of Credit
Amendment to increase the value, change the expiration date, and/or modify the issuing bank (TSBĐ) of the Letter of Credit.
Applied as the fee for issuing the Letter of Credit for additional value/changes in the issuing bank (TSBĐ)/extension period, as a percentage of the corresponding value.
1.3 Pre-Advice of Letter of Credit 50USD
1.4 Cancellation of Letter of Credit upon request 20 USD + the fee to be paid to the State Bank of Vietnam (if applicable).
1.5 Fee for processing additional/replacement import documents 10 USD/document set.
1.6 Payment for document set 0.2% /the document set value Minimum: 30 USD. Maximum: 500 USD.
1.7 Acceptance of deferred payment under the
Document set with a 100% collateral deposit 30 USD
1.8 Document set with collateral deposit less than
0.1%/month calculated on the value of the invoice from the acceptance date to the due date Minimum:
Amendment to accepted deferred payment commitment.
Extension of the deferred payment acceptance period.
Similar to the fee for accepting deferred payment under the Letter of Credit, calculated from the old due date to the new due date.
The value of deferred payment commitments has increased, akin to the fee associated with accepting deferred payment under a Letter of Credit This fee is calculated from the amendment date to the new due date, reflecting the additional amount involved.
1.9.1 Issuance of a letter of credit for a receiving goods guarantee 50USD
Maintenance fee for the letter of credit guarantee for receiving goods (in cases where the receiving goods guarantee does not have an expiry date).
Refund of the guarantee within 60 days from the date of issuance of the guarantee Free of charge
Refund of the guarantee after 60 days from the date of issuance or non-refundable
(collected on the 61st day from the date of issuance).
0.15% of the guarantee value Minimum: 50 USD. Maximum: 200 USD. 1.9.3 Amendment to the receiving goods guarantee 20USD/times
1.10 Signing the bill of lading/Issuance of a letter of authorization for receiving goods.
Before notifying the status of the document set 15USD
After notifying the status of the document set 5USD
1.11 Consultation fee for international trade contracts upon customer's request.
According to the agreement, minimum 20 USD.
1.12 Consultation fee for issuing Letter of Credit upon customer's request.
According to the agreement, minimum 20 USD. 1.13 Fee for processing import Letter of Credit transactions (issuance, amendment, payment) 20USD/transaction
(Data sources are extracted from banks' websites)
Ordinal numbers TYPES OF FEE CHARGES
2.2 Amendment to collection instruction 5USD
2.3 Payment under collection 0.2% of the document value
2.4 Processing fee for import collection transaction 20USD
2.5 Cancellation of collection 5 USD + Incurred fees (if any)
2.6 Signing the bill of lading/Issuance of letter of authorization for receiving goods under collection
Before documents are presented to the bank 30USD
After documents are presented to the bank 10USD
2.7 Guarantee for receiving goods under collection
2.7.1 Issuance of guarantee for receiving goods under collection 50USD
2.7.2 Amendment to guarantee for receiving goods under collection 10USD
2.7.3 Maintenance fee for the guarantee for receiving goods under collection
Refund of the guarantee within 60 days from the date of issuance Free of charge
Refund of the guarantee after 60 days from the date of issuance or non-refundable 0.15% of the guarantee value
2.8 Forwarding fee for import collection document set to another bank
5 USD + postage fee + telecommunication charges (if incurred)
2.9 Management fee for import collection document set 5 USD per set per month
Minimum: 5 USD (Data sources are extracted from banks' websites)
NO FEE AND CHARGE CATEGORIES
APPLIED FEES AND/OR CHARGES (excluding VAT)
2.1 Inward overseas remittance (BIDV will collect additional credit fee as required by
Nostro bank beside the applicable fee schedule (if any))
2.1.1 Transferring to beneficiary's account at
- Charge for Beneficiary Party 0.05% amount Minimum
- Charge for Ordering Party Do not collect fees and charges from beneficiary but from remitting bank based on Fees and Charges Schedule applied to Correspondent banks
2.1.2 Cash Received at BIDV 0.05% amount, Minimum
USD 5 Maximum USD100 + cash withdrawal in foreign currency fee 2.1.3 Forwarding to beneficiary at another bank
Charge for Beneficiary Party (Charge type:
0.06% amount Minimum USD 3, Maximum USD 100/transaction + message fee
Charge for Ordering Party (Charge type:
DEBT) Do not collect fees and charges from beneficiary but from remitting bank based on Fees and Charges Schedule applied to Correspondent banks
USD 10, maximum: USD 50 + message fee
2.3 Notify the money to the recipient at the request of the remitter USD 1/transaction
(Data sources are extracted from banks' websites)
Export payment 29
BIDV provides exporters with fast and secured international payment services, including:
Upon receiving LC from the issuing bank, BIDV provides the following services:
- advising LC/ LC amendment to the beneficiary
- Document checking and sending for collection
A documentary collection is a payment method where the exporter instructs their bank to collect payment from the importer based on shipping documents The bank releases these documents to the importer only upon payment or acceptance of the Bill of Exchange, ensuring that the importer can receive the goods only after fulfilling their payment obligation.
- BIDV receives documents from customers, then checks and sends them to a foreign bank for collection.
- Types of collection BIDV provides
D/P (Documentary against Payment): The bank will hand over the documents to the importer only when the importer makes payment.
D/A (Documentary against Acceptance): The bank will hand over the documents to the importer only when the importer accepts to pay the Bill of exchange at maturity
Inward remittance: Inward remittance is for exporters with payment terms as T/T and receiving money from foreign partners through the SWIFT remittance system between foreign banks and BIDV.
Fast and secure transactions through BIDV's worldwide network.
Consultancy for customers regarding the contract terms, L/C terms, and forms of payments to ensure the most benefits for our customers.
Export financed in various forms.
Ordinal numbers TYPES OF FEE CHARGES
-L/C received directly from Issuing bank 20 USD
-L/C received from a bank other than the issuing bank
20USD + advance notification bank fee
+ Fees paid to the State Bank (if any) 1.5 Document processing fee
- Check the set of documents according to
- Not checking the set of documents 5USD/documents according to L/C (at the customer's request)
1.6 Payment of documents according to L/C
0.15%/credit value of documents (Minimum: 20USD, Maximum: 200USD) 1.7 Rejected payment from foreign bank Additional fees (if any) 1.8 Fee for amending/adjusting the money request letter according to customer's request
BIDV offers assistance in completing export documents, with an additional charge applicable only when the inspection is supported by BIDV but presented at a different bank, or for support in completing export documents from the third request onward.
0.05% of invoice value, (minimum 20USD, maximum 100USD)
1.11.1 Transfer export L/C 0.1%/value of transferred LC
+ message fee/postal fee according to actual arising 1.11.2 Notice of amendment to transferable L/C
- Modification to increase the amount Such as export L/C transfer fee calculated on the additional amount
Processing fee for presenting a set of documents to request money according to the transfer L/C
- Check and replace the set of documents according to the transferable L/C 30USD/set of documents
- Failure to check and replace the set of documents according to the transfer L/C 5USD/set of documents 1.11.5 Payment of documents according to transferable L/C
- Payment to the second beneficiary
0.2%/Value of documents presented by the second beneficiary(Minimum: 30USD,Maximum: 500USD)
- Payment to the first beneficiary
0.2%/value to first beneficiary (Minimum: 20USD, Maximum: 200USD) (Data sources are extracted from banks' websites)
Ordinal numbers TYPES OF FEE CHARGES
2.1 Processing collection of payment documents 5USD + postage (incurred)
2.2 Payment of documents 0.2%/value of documents
2.3 Modify instructions for claiming money 10USD
2.4 Cancel collection upon request 10USD+ Incurred fees (if any) 2.5 Collection payment is refused 10USD+ Incidental fee (if any) 2.6 Check collection according to customer's request Message fee
2.7 Forward collection documents to another bank 5 USD/set + postage + message charges incurred (Data sources are extracted from banks' websites)
NO FEE AND CHARGE CATEGORIES APPLIED FEES AND/OR
USD 5; Maximum USD 300 per transaction + message fee
1.2 Fee collected by foreign bank (if the remitter agrees to pay this fee, charge type: DEBT)
1.2.1.1 Payment order in USD (applicable for beneficiary bank outside the US) (1) 22 USD 1.2.1.2 Payment order in EUR
Beneficiary's account at bank in Germany 10 EUR
Beneficiary's account at bank outside
1.2.1.3 Payment order in GBP 22 GBP
1.2.1.4 Payment order in CAD 35 CAD
1.2.1.5 Payment order in KRW (to Korea)
Beneficiary's account is not at Kookminbank
(**) Applicable for the following banks:
Industrial Bank (IBKOKRSE), Woori Bank
1.2.2.1 Payment order in USD (applicable for beneficiary bank in the US) 5 USD
1.2.2.2 Payment order in JPY Actual fee Minimum 5000
JPY (Advance charged when processing payment)
1.2.2.3 Payment order in other currencies 30 USD
1.3 Cancellation of payment as requested by remitter USD 5 + message fee + foreign bank fee (if any)
1.5 Back value fee collected by foreign bank As per actual arising + USD
30/order(Data sources are extracted from banks' websites)
The evaluation of the performance of international payment service for corporate
Comparison table of the methods of international payment of BIDV, Vietinbank, Agribank and Vietcombank
- When transferring foreign currency, customers receive predetermined VND
- Same-day Asian money transfer
- Transfer money for cross-border payments
- Transfer money via regular SWIFT
- Buy and sell foreign currency futures
- Border trade payment via CBPS
- Buy and sell foreign currency swaps
- Buy and sell foreign currency for immediate delivery
Vietcombank divides payment methods according to service users
+ Letter of credit + Thanks for collection + Money transfer
+ Letter of credit + Thanks for collection + Money transfer + Factoring
(Data sources are extracted from banks' websites) Banks have different ways of dividing their own international payment service. However, in general, they still have similar methods of international payment.
Comparison table of international payment service fees of BIDV, Vietinbank, Agribank and Vietcombank
+ For import payment: 0.1% x payment amount,
+ in-system money transfer fee, (minimum 80,000 VND)
Transferring to beneficiary's account at BIDV: 0.05% amount (Minimum
For fees paid by beneficiary: fees will be 0.05% (minimum is 5 USD, maximum is 50USD)
Inward remittance: fees depend on each person, for people with accounts at Vietcombank, it is free
Maximum USD 300 per transaction + message fee)
- Domestic fee paid by the sender/beneficiary:
0.2% of the transfer value (minimum is 5 USD, maximum is
Outward Remittance: 0.2% (Minimum 5 USD, Maximum 300 USD)
Our analysis of data from various banks' websites reveals that international payment service fees can vary significantly depending on the transaction type, partner, and timing While Agribank and Vietinbank generally charge higher service fees compared to BIDV and Vietcombank, the differences among these four banks are not substantial Notably, some banks, such as BIDV, offer fee waivers for specific transactions, like export payment fees for cross-border activities.
Comparison table of transaction speeds of BIDV, Vietinbank, Agribank and Vietcombank
Money transfer: From 1 to 2 working days
Documentary credit (L/C): From 2 to 5 working days
Documentary credit (L/C): From 2 to 5 working days
Documentary credit (L/C): From 2 to 4 working days
Depending on the time of receipt of invoice or other documents from the seller
Depending on the time of receipt of invoice or other documents from the seller
Depending on the time of receipt of invoice or other documents from the seller
Recording: Depending on the time of receipt of invoice or other documents from the seller
Transaction collection times typically range from 3 to 7 working days, with variations depending on the type of transaction and banking partners involved Research indicates that Vietcombank and BIDV generally process transactions more quickly than Agribank and Vietinbank, likely due to their advanced information technology systems and extensive correspondent bank networks.
Comparison table of reliability and safety of BIDV, Vietinbank, Agribank, and Vietcombank
Bank's international reputation (credit rating): Ba3
Bank's international reputation (credit rating): Ba3 (Moody's), BB- (Fitch)
Not yet ranked in international reputation
Bank's international reputation (credit rating): Ba2 (Moody's), BB- (Fitch)
Bank service quality (based on
Bank service quality (based on CSI - Customer Satisfaction Index):
Bank service quality (based on CSI - Customer Satisfaction Index):
Bank service quality (based on CSI - Customer Satisfaction Index): 82.1 points
Bank information security (according to information
Bank information security (according to information
Bank information security (according to information
According to the information security department's report, there were a total of 15 bank information security incidents with no serious occurrences Additionally, the report highlighted 18 incidents in another category, which included one serious incident Furthermore, 21 incidents were recorded, resulting in two serious incidents, while a separate report noted 12 incidents with no serious events.
When evaluating the safety and reliability of banks, key criteria include charter capital, bad debt ratio, international reputation, service quality, and information security BIDV ranks second in safety and reliability, following Vietcombank The bank is committed to risk management and continuously enhances technology to ensure secure and efficient international payment transactions BIDV's reputation is further solidified by its positive performance, fostering increased trust among partners and customers both domestically and internationally In 2022, BIDV was recognized as one of the top 10 prestigious commercial banks in Vietnam by Vietnam Report.
Comparison table of current preferential and promotional policies of BIDV, Vietinbank, Agribank and Vietcombank
Free electric money transfer to customers using export services
Support preferential interest rates for customers using UPAS L/C service
Receive an immediate refund of 200,000 VND when paying with Apple Pay and Vietcombank Visa card, Receive 1500 Bamboo Club bonus points immediately when paying with Vietcombank Visa card
Money transfer: Free to check documents and advise customers on collection services
(L/C): High discounts for customers using export services
Documentary credit (L/C): Special policy adjustments specifically for Vietinbank Priority customers at VietcombankS
Documentary credit (L/C): Give extra bonus points to customers who use the bank's international cards to make payments globally
Documentary credit(L/C): High discounts for customers using export collection services
Open account: Free Open account: Free Open account: Free Open account: Free
Collection: High discounts for customers using export services
Collection: Support preferential interest rates for customers using UPAS L/C service
Collection: Give bonus points to customers who use the bank's international cards to make payments globally
Collection: High discounts for customers using export collection services
Many banks implement incentive and promotional programs to encourage the use of international payment methods, enhancing customer attraction and competition For instance, Vietcombank rewards customers with bonus points for global payments made with their international cards, while Agribank provides significant discounts on export collection services Additionally, BIDV offers free wire transfers, and Vietinbank supports customers utilizing UPAS L/C services with preferential interest rates.
Comparison table of the number of correspondent banks of BIDV, Vietinbank, Agribank and Vietcombank
Wide network of agent banks/international payment market
BIDV has established agent relationships with over 1,700 banks and branches in 122 countries and territories worldwide.
Industrial and Commercial Bank has agent relationships with over 1,000 reputable banks in all countries and has cooperation contracts on remittances with many foreign banks at low fees.
More than 1316 correspondent banks in 102 countries and territories worldwide.
Agribank has agent banking relationships with
667 banks and branches in 82 countries and territories Agribank has established 40 Nostro accounts and 20 Vostro accounts with major agent banks across the country globally.
(Data sources are extracted from banks' websites)
Experts assess the development level of banks by examining the number of correspondent banks and the extent of their branch networks According to the data, BIDV stands out as the leading bank in terms of agent banks, followed by Vietcombank, Vietinbank, and Agribank This success can be attributed to BIDV's substantial charter capital and its effective use of advanced information technology.
Strengths 41
BIDV boasts a vast global network, partnering with 1,100 banks and maintaining over 50 Nostro accounts with major international banks With joint ventures across countries like Singapore, Malaysia, Cambodia, Laos, and Russia, BIDV enhances its global footprint through representative offices in Cambodia, Laos, Myanmar, Russia, and Taiwan, along with a branch in Myanmar Furthermore, the bank has established agent relationships with over 1,700 banks in 122 countries, solidifying its brand presence and expanding trade promotion in key markets such as the Russian Federation, Europe, and Northeast Asia This extensive network significantly enhances customer access to financial services, enabling seamless transactions at various retail locations for a more convenient banking experience.
BIDV offers a wide range of flexible products and services tailored to meet the diverse needs of its customers, featuring a comprehensive portfolio of international payment services aligned with global standards By leveraging advanced technology, BIDV enhances transaction efficiency and transparency, addressing the growing demand for digital transformation in customer interactions The bank has introduced innovative features on its Mobile Apps and implemented AI-driven solutions like Voicebot and Chatbot for improved customer support, alongside utilizing machine learning to analyze customer data, thereby enriching the digital experience In recognition of its technological advancements, BIDV was honored with several awards in 2022, including the Vietnam Digital Awards (VDA).
BIDV boasts a professional and experienced team dedicated to providing exceptional customer support and advice The bank continuously innovates its recruitment processes, tailoring conditions and standards to select a high-quality workforce that aligns with the specific requirements of each position For instance, BIDV offers services that assist with foreign trade contract terms, letters of credit (LC), and payment methods, ensuring optimal benefits for customers utilizing the bank’s international payment services With well-qualified professionals, BIDV is committed to delivering the best advisory services to its clients.
Weaks 42
BIDV faces challenges in meeting customer technology needs, as Vietnam's information technology infrastructure remains underdeveloped compared to other countries Despite implementing various technological applications, BIDV struggles to adopt advanced techniques for launching innovative products Additionally, customers often encounter issues such as unstable transmission lines and slow transaction speeds while using BIDV's banking applications, which negatively impacts overall customer satisfaction.
BIDV is currently facing a significant shortage of high-quality human resources, particularly those with a deep understanding of international markets Despite the banking and finance sector producing tens of thousands of graduates annually, these individuals often fall short of job requirements, typically only qualifying for basic roles, which increases their vulnerability to layoffs In response, banks are not only hiring new talent but also actively filtering out personnel who do not meet the necessary standards This issue of inadequate high-quality human resources is not unique to BIDV; it reflects a broader challenge across the entire banking industry.
BIDV's current organizational structure is overly complex and multi-layered, hindering effective communication, coordination, and management among its units This structure fails to adequately represent the significance of international business activities within BIDV's development strategy, resulting in a lack of real connection between departments To achieve its international business development goals, BIDV needs to adopt a more streamlined and cohesive organizational framework.
Opportunities 43
The advancement of information and communication technology, particularly through the internet, mobile phones, applications, QR codes, blockchain, and cryptocurrency, has enabled BIDV to enhance and innovate its international payment products and services Additionally, with BIDV's primary technology platforms, BIDViBank and BIDVSmartbanking, the convenience of international payments for customers utilizing BIDV's services has significantly increased.
International integration is an essential trend in the banking sector, presenting significant opportunities for BIDV to expand its market presence and collaborate with global financial institutions This integration process has enabled BIDV to form partnerships with major financial organizations worldwide Early on, BIDV capitalized on these opportunities, establishing six international investment projects, including the Lao-Vietnamese Joint Venture Bank in Laos, the Lao-Viet Insurance Company, representative offices in Taiwan and the Russian Federation, the BIDV branch in Myanmar, and the Bank for Investment and Development of Cambodia.
Threats 43
Competition in the banking sector is intensifying, particularly from established domestic and international banks specializing in international payments BIDV's international payment services exhibit several areas needing enhancement, including a lack of differentiation in products and services, limited brand development focused primarily on major cities, and inconsistent brand identity across its network In light of the current trend of global integration, BIDV faces competition not only from local banks but also from formidable international institutions Therefore, it is crucial for BIDV to implement strategies to bolster its competitive edge.
The increasing risk of information security breaches in international payment transactions poses a significant challenge for BIDV, as hackers, viruses, and unauthorized third parties threaten sensitive data With the rapid technological advancements adopted by banks, cyber-attacks have become more sophisticated and prevalent, particularly in Vietnam's banking sector This growing trend raises concerns among regulators and financial institutions alike, making it essential for banks, especially BIDV, to prioritize the prevention of digital technology risks.
International integration presents both opportunities and significant challenges for commercial banks, particularly BIDV These challenges include intense competition, pressure for reform, financial and security risks, and a shortage of skilled human resources Additionally, increased capital transactions, both domestically and internationally, heighten risks within the banking system A sharp rise in capital inflows may lead to an overheated economy, with the money supply growing excessively in relation to real GDP, potentially resulting in inflationary pressures, exchange rate fluctuations, and risks to the balance of payments and liquidity in the banking sector.
CONCLUSION 44
In recent years, the Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV) has made significant strides in enhancing service quality and diversifying its product offerings to boost business performance The dedicated efforts of the Bank's leadership and staff have yielded impressive results, despite ongoing challenges To further promote effective business operations, the Board of Directors is committed to exploring innovative solutions Notably, the Bank's international payment activities have seen daily growth, marked by increased scale and efficiency, positioning BIDV for substantial future growth.
MEETING MINUTES About The unanimous evaluation of the work process of group 6
- Team leader : Vũ Thị Thu Trang
Trần Huyền Trang Đoàn Thị Tuyết
- The chairperson stated the reason: Agree to evaluate the working process of the group of 6 International payment & Export-Import Financing, adjust the transcripts of the members
- Raise the evaluation and comment of each member during the discussion Vote for or against by all members
- Raise the opinions of each member during the discussion to learn from experiences
- After voting, the group voted unanimously with the member evaluation table with the following scores:
OUTLINE GROUP 6 Topic: International payment service at Joint Stock Commercial Bank for
Investment and Development of Vietnam (BIDV)
II THEORETICAL BASIS (Vũ, Vy)
2.4 The legal framework of International payment
III International payment service for corporate customers at Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV)
3.1 Introduction of The Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV) (Hoàng Trang, Huyền Trang)
3.1.3 Overview of BIDV’s financial situation from 2020-2022
3.2 International payment service for corporate customers at The Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV)
3.2.1 Available methods of international payment for corporate customers at BIDV (Vân Trang, Tiến)
3.3 The evaluation of the performance of international payment service for corporate customers at The Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV) (Thùy Trang, Vũ Trang)
3.3.2 SWOT analysis of BIDV’s international payment service for corporate customers
Highlight: Tuyết, Vũ Trang, Hoàng Trang
Presenters: Vũ, Vy, Vũ Trang
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