In the Forum on trade and economic development and tourism promotion between Vietnam and Russia" held on May 18, 2016 at the Hanoi-Moscow Trade Center, Moscow, Russian Federation with the presence of Vietnamese Prime Minister Nguyen Xuan Phuc, BIDV reported on the results of the Vietnam – Russia bilateral payment channel.

​Pioneering role

Vietnam and Russia have special and comprehensive ties. However, in recent years, the economic, trade and investment results between the two are not commensurate with their potential. One of the causes is the less development of the payment in local currency of the two countries, and almost all the import-export volumes were paid in strong foreign currencies, triggering the need for a payment channel to unlock the business cooperation potential.

During the visits of the Vietnamese leaders to the Russian Federation in 2012 and 2014, Vietnam and Russia set to raise the two-way trade turnover to USD10 billion by 2020. The two countries also agreed to strengthen and diversify cooperation in finance and banking, including the use of payment cards and local currencies in payment, strengthening the participation of Vietnam – Russia joint venture bank (VRB) in the implementation of bilateral petroleum and energy projects.

According to the results of the talks between the Prime Ministers of the two countries in 2015, BIDV was chosen as Vietnam’s bank to work with VTB Bank (one of the largest banks in Russia) to research and develop a separate payment channel between Vietnam and the Russian Federation. That BIDV and VTB signed an MOU on implementing the channel clearly shows high resolve of the two banks.

The establishment of Vietnam - Russia bilateral payment channel contributed to easing the difficulties, which have remain for over the past 30 years, in payment encountered by importers and exporters of the two countries.

It is estimated that after the FTA takes effect, two-way turnover of the two countries will increase by 18-20 percent annually to reach approximately USD10-12 billion by 2020 and exports from Vietnam to Russia would be increased by 63 percent. This is one of the favorable conditions that stimulate the trade of the two countries, laying foundation for establishing a bilateral payment channel to facilitate import and export payments, addressing the bottlenecks in trade between the two.

Preeminent channel

With years of experience in implementing international payments and bilateral payments, BIDV collaborated with VTB to build a bilateral payment channel and card connections in the local currency. BIDV and VTB have officially launched bilateral payment products and services since November 2015.

The Vietnam National Financial Switching Joint Stock Co. (Banknetvn) and Russia’s National Payment Card System (NSPK) are in the process of reaching on the fundamental principle of card connections. Expectedly by Q4-2016 cards will be accepted at ATMs and POS between the two nations.

The BIDV-VTB bilateral payment channel has advantages: faster processing time: maximum 2 hours after the bank receives all valid documents; exchange rate and low cost; preferential policies: BIDV provides credit packages worth USD200 million to support businesses who import or export to and from the Russia with preferential interest rates, competitive forex trading price and preferential service fee; all-in-one package: BIDV and VTB signed master contracts to provide services for forex trading in rubble (RUB), bill of exchange discounting, factoring to customers.

Strong momentum

More than 30 customers used the bilateral payment channel since its launch. As of Q1-2016, number of transactions reached 115, with payment volume reaching more than USD3 million. The above results though modest show the businesses’ interests in finding out about the channel.

Besides the USD transactions, BIDV successfully implemented six transactions in ruble (3 inward and 3 outward), with sales in April 2016 reaching more than 8 million rubles.

Recently, the auto importer One Service Trading successfully conducted the first rubble transaction worth over 8 million rubles, starting the series of monthly payment under a framework contract worth more than 1 billion rubles.

More than 50 exporters used BIDV’s services for payment to the Russian market, of which over 30 have chosen the bilateral payment channel. Some customers chose the payment channel as their main payment channel for transactions with the Russian market, such as An Phat-Yen Bai Mineral and Plastics Co., European Plastics JSC, Hikosen Cara Co., Ltd., Thanh Nga Commerce and Construction Co., and Rosviet Co., Ltd.

Besides the corporate customers doing import and export between Vietnam and Russia, a number of individual customers, travel companies, organizations who have payment needs in rubble to the Russian market also chose and used the payment channel.