Domestic and International Payment Services

The regulatory body, in terms of credit currency, is the Bank of Banks, while commercial banks specialize in currency trading.

Money creation ability is the ability to turn the initial deposit at the first deposit-receiving bank into a much larger amount of money, through the implementation of payment and credit operations at many banks.

Money creation is an important function, clearly reflecting the nature of commercial banks. With the goal of seeking profit as a main requirement for their existence and development, commercial banks with their specific business operations have invisibly performed the function of creating money for the economy. The function of creating money is implemented on the basis of two other functions of commercial banks: credit function and payment function. Through the credit intermediary function, banks use mobilized capital to lend, the loaned amount is used by customers to buy goods, pay for services while the balance in customers' payment deposit accounts is still considered a part of transaction money, used by them to buy goods, pay for services... With this function, the commercial banking system has increased the total means of payment in the economy, meeting the payment and spending needs of society. Commercial banks are credit institutions whose main activity is currency trading.

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From the three basic functions above, we can also see the great role of commercial banks in the economy. The activities of commercial banks speed up the payment process, reduce transaction costs and create a favorable environment for the capital circulation process of the economy, improve the quality of the process of concentration and distribution of capital. Commercial banks are also money-making machines, they play an important role in implementing monetary policy and contribute to macroeconomic regulation under the influence of the Central Bank and State policies.

In a market economy, the banking system is considered the “circulatory system” of the economy. Through the banking system, capital flows to where it is needed, meeting the needs of investment, production and circulation of goods of the whole society. An economy that wants to develop quickly and sustainably cannot lack a system.

Commercial banks are strong and widely developed. Therefore, the development of the banking system can be considered as a representative of the development of a country's economy.

1.1.3. Characteristics of commercial banks

First of all, commercial banking activities are a form of business for profit, pursuing the main goal of profit. Banks carry out two forms of activities: currency business and banking services. In which, currency business activities are expressed in capital mobilization activities in different forms, to provide credit to customers with capital requirements with the goal of seeking profit. Commercial banks are those who "borrow to lend" for the purpose of making profit. Banking service activities are expressed through available instruments of currency, payment, foreign exchange, securities, to commit to performing certain work for customers within a certain period of time for the purpose of collecting service fees or commissions.

Second, commercial banking activities must comply with the provisions of law, meaning that only when commercial banks fully satisfy the strict conditions prescribed by law such as capital conditions, business plans... will they be allowed to operate in the market.

Third, commercial banking activities are a form of business with a much higher risk than other forms of business and often have a profound impact on other sectors and the entire economy. The reason for this is that in banking activities, especially in monetary business activities, banks mobilize capital from others and then use that capital to provide credit to customers according to the principle of repaying principal and interest within a certain period of time, which creates risks for commercial banking activities. Risks come from the bank, customers borrowing money, risks come from objective factors. Therefore, commercial banks have to face high risks, leading to risks for depositors in commercial banks as well as risks for the economy. To avoid unfortunate risks, to control and mitigate the damage caused by bank insolvency, governments of countries have set up separate laws to ensure that this activity is operated safely and effectively in the market economy.

1.1.4. Main activities of commercial banks

Along with the development of commercial banks, the activities and services of commercial banks are increasingly expanded. But in general, the activities of commercial banks include three main activities: capital mobilization, capital use and intermediary activities.

Capital mobilization activities : This is the initial activity for other activities of commercial banks. Commercial banks are essentially financial intermediaries whose main operating characteristics are not based on equity capital. Therefore, in order to have operating capital and provide capital for the economy, in addition to equity capital, commercial banks must mobilize temporarily idle capital sources in the economy through activities such as receiving deposits, issuing bills, bonds, borrowing from other credit institutions or from the Central Bank.

Capital use activities : After mobilizing capital, to offset the cost of capital mobilization and make a profit, commercial banks must find ways to effectively use these capital sources to earn interest. This is the main activity and brings the largest proportion of income to commercial banks. Commercial banks use capital in the following basic directions: credit activities, securities investment, investment in purchasing fixed assets and equipment, treasury activities, in which credit activities are the most important because they bring the majority of income to the Bank.

Intermediary activities of commercial banks include payment activities, asset management activities for customers, securities issuance activities, securities trading and preservation activities, information provision activities, business consulting and corporate governance... These intermediary activities do not bring the main source of income for commercial banks, but they are important in expanding capital mobilization and use activities, while diversifying activities, reducing risks and increasing income for banks.

Above are three basic groups of activities of commercial banks, each activity has different characteristics but is closely related, closely linked and complements each other. Therefore, for bank managers, no activity should be taken lightly.

but must always put the relationship between them while devising strategies as well as business plans to achieve efficiency in operations.

1.2 Non-credit services in commercial banks

1.2.1 Concept of non-credit services

Banking services are all activities that a Bank or credit institution provides to customers to meet their financial and monetary needs, contributing directly or indirectly to increasing the Bank's income.

Banking services include both credit services and non-credit services. Credit services are services provided by banks to customers to meet their capital needs for production, business, consumption, and investment. Credit services include: Loans, Guarantees, Overdrafts, Investments, Financial leasing, etc.

The concept of credit is agreed by many economists as: It is a transaction relationship between two entities in which one party transfers money or assets to the other party for use within a certain period of time. The party receiving the money or assets must commit to repay both principal and interest within the agreed term.

The concept of non-credit services has not been defined in any scientific research. According to the viewpoint of Deloitte Touche Tohmatsu organization when researching the project: "Survey and evaluation of non-credit services of Vietnamese banks", non-credit services are any services of banks or credit institutions that are not credit services.

Non-credit services are services that, when provided by a Bank or Credit Institution, do not generate transactions related to the provision and recovery of capital for customers.

There are many different views on non-credit services. Whether a banking service is considered a non-credit service or not depends on the perspective and assessment of each author. In addition to the above views, there is also a view that non-credit services are services provided by banks to customers to collect fees, commissions, differences or simply to enhance the reputation of the bank.

For convenience in the research process, in the author's opinion: Non-credit services are banking services that do not generate transactions related to the provision and recovery of capital for customers, provided by the Bank to customers to directly or indirectly bring the Bank a certain income through the form of fees and commissions.

1.2.2 Types of non-credit services

The types of services of commercial banks are increasingly diverse and rich. Besides the traditional credit service, non-credit services are developing strongly with many new types of services emerging.

The listing of non-credit services is only relative. Depending on the time and each Bank, the division may be different. Based on the nature of the service, non-credit services can be divided into the following types of services:

1.2.2.1 Domestic and international payment services

The development of market economy promotes trade relations within the country and between countries in the world. Banks act as payment intermediaries and bridges between market participants.

Payment services bring service fees to the Bank, on the other hand, they also bring many benefits to customers, moreover, they create a circulation of capital and goods in the economy, creating conditions for socio-economic development. For a country, when payment services through the Bank develop, it also contributes to implementing the monetary policy of that country.

Depending on the scope of transactions, payment services include domestic payment services and international payment services.

Along with the development of science and technology, especially information technology, the Bank's payment services are diversified and improved. Payment speed is increased along with high accuracy and security. Payment scale is expanded, not only serving customers who are businesses, socio-economic organizations but also individuals in all areas of people's lives. Payment tools

Payment is also increasingly diverse and complete, including: Payment by check, Payment by UNC, UNT, Payment by bill of exchange, promissory note, Payment by card, Payment via payment network connecting international banks (Swift), Payment by L/C,...

Remittance service is a type of international payment service. The service meets the needs of receiving and transferring money for individual customers. The service ensures convenience, speed, cost savings and accuracy, meeting the needs of transferring remittances to the country of all customers through a global network including correspondent banks and money transfer companies and a network of branches, transaction offices and payment agents nationwide.

Remittance service allows customers to fully enjoy the conveniences based on modern electronic money transfer technology, allowing money transfers from anywhere in the world to every province in Vietnam. Remittance service focuses especially on serving overseas Vietnamese who transfer money to the country and Vietnamese people who work abroad.

1.2.2.2 Card services

Card service is a modern banking product and service for individual customers in addition to traditional products and services.

Card is a payment tool, there are 2 main types of cards: Payment card (Debit Card) and credit card (Credit Card).

A payment card is a type of card that allows the cardholder to pay for goods and services, withdraw cash, etc. based on the balance in the cardholder's payment account. There are many types of payment cards, allowing transactions at different limits, with rich and diverse forms, suitable for consumer tastes.

Credit card is a type of card that allows the cardholder to pay for goods and services, withdraw cash, etc. based on the credit limit of the card issuing organization for the cardholder. Nowadays, credit cards are developing strongly. It is a tool to encourage people to consume goods and services, thereby stimulating economic development.

production development. In the world, international card organizations have been formed such as: VISA,

MasterCard, Amex, DinnerClub.

In addition, some banks also offer a mixed card that is both a payment card and a credit card, bringing many benefits to customers. This type of mixed card is being widely replicated in some banks and can suit the needs of customers because it combines many features on the same card.

1.2.2.3 Electronic Banking Services

According to Clause 6 and Clause 10, Article 4 of the Law on Electronic Transactions passed by the National Assembly of Vietnam on November 29, 2005, electronic transactions are transactions conducted by electronic means. In which, electronic means are means that operate based on electrical, electronic, digital, magnetic, wireless transmission, optical, electromagnetic or similar technology.

Based on the above regulations, transactions for purchases at the counter and payment by credit card, that is, swiping the card into the POS machine to automatically print out the card statement and sales invoice, are considered electronic transactions because credit cards are electronic means.

Thus, the concept of electronic transactions is not only limited to the Internet and other information networks, but also extends to all transactions carried out by electronic means.

Electronic transactions in Banking services are transactions by electronic means in Banking services, in other words, Banking services are transacted by electronic means (abbreviated as "Electronic Banking services").

Electronic banking services are services that are transacted by electronic means, and their development depends on the development of electronic means - that is, on the achievements of science and technology, especially information technology and telecommunications. Therefore, new achievements of science and technology have a certain impact on the development of electronic banking services and pose new problems for the legal environment. Therefore, research on electronic banking services must be closely linked to research on the legal environment.

Accordingly, the most popular e-banking services at Vietnamese banks today are: SMS via mobile network (BSMS), information via internet (Directbanking), Homebanking, POS, VnTopup, Vnmart, bill payment,... Other banks also have similar services but under different names.

E-Banking service allows customers to query or pay for services via text messages or online transactions, at ATMs without having to go to the Bank.

1.2.2.4 Treasury services

Including cash collection and delivery services for customers, exchange of unqualified money (both domestic and foreign currencies), storage of valuable assets and valuable papers as requested by customers.

Banks all have warehouses designed according to the standards of the State Bank to keep cash, valuable assets, valuable papers, etc., ensuring they are dry, airy, and protected from outside intrusion.

Banks may accept cash counts at the request of customers and charge a fee when customers deposit money that is not intended for payment or deposit purposes. Banks may also charge a service fee when paying money at the request of customers. Paying money to locations requested by customers. Holding cash for customers overnight.

In addition, the Bank can use its warehouse to receive and store valuable assets: precious metals, precious stones, ... Valuable papers, important documents according to customer requirements.

1.2.2.5 Other services

In its operations, the Bank also provides many other types of services such as: Consulting services, collection and payment services, check services (some banks classify collection and payment services and check services as payment services), insurance business services, investment,... capital contribution to buy shares.

However, this is not a regular service of the Bank. There are services that do not bring significant revenue to the Bank, the Bank maintains

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