Bank Cards: Increasingly Popular in Vietnam

In recent years, in addition to traditional services, banks in Vietnam have continuously introduced new services to suit the actual conditions of the people. Bank cards are such a service. According to the Vietnam Banks Association, at the start of June 2010, Vietnam had more than 24 million bank cards, 48 card issuers, over 190 card brands, nearly 11,000 ATMs and, 37,000 points of sale (POS). At the end of April 2012, the country had 52 card issuers with more than 300 card brands, and over 44.6 million cards (an increase of 12 times over end-2006), of which debit cards account for 94 percent, credit cards made up for 2.5 percent, and prepaid cards were 3.5 percent. These figures were impressive in the roadmap of implementing the non-cash payment scheme in Vietnam ratified by the Government.

 

However, cash is still the king of daily payment. Hence, POS are uninterested in encouraging customers to pay by card because users have to pay an extra fee for banks. Another reason is the limited presence of POS. Indeed, card payment at POS is unfamiliar to most people. The result of interconnecting POS networks shows that card development is a long road ahead. The current POS interconnectivity is limited and there are a lot of problems need to be resolved like undeveloped card acceptance environment and low POS payment value.

 

According to statistics, before 2010, POS transactions in Vietnam were limited, mainly by international card users. A small number of POS was installed but interconnectivity was weak. Many domestic cards were not accepted by POS, a reason for insufficient popularity in Vietnam,

 

In order to diversify services, accelerate the application of e-payment technologies and focus on non-cash payment development to meet economic needs, in late December 2011, the Prime Minister approved the second phase of the non-cash payment scheme in Vietnam (2011 - 2015). Accordingly, by the end of 2015, cash in circulation will be brought to less than 11 percent; 35 - 40 percent of people will have bank accounts; and 250,000 POS will be installed, to handle 200 million transactions a year.

 

To develop cards in nature and synchronise POS, in 2010, the State Bank told its provincial/municipal branches, commercial banks, and switching companies to interconnect POS networks nationwide. At the end of 2011, technical connections were basically completed. At the end of the first quarter of 2012, as many as 32,000 POS administered by 533 credit institution branches were interlinked and over 4,000 units nationwide (commercial centres, shops, hotels, supermarkets, etc.) accepted POS card payment.

 

Speaking to the conference, Mr Le Thanh Tam, General Director of IDG ASEAN Group, said: “Since 2009, many banks in Vietnam have invested a lot to upgrade technological infrastructure, diversify banking products and services, improve service quality, and build multi-channel service systems, thus contributing to modernisation and improvement of banking service quality. This is a bright point in the process of modernising Vietnamese banks now.”

 

Mr Bui Quang Tien stressed that the potential of the card payment market is tremendous and all banks are aware of this, but it requires much of their time and effort with State support to develop these channels. He proposed that Vietnam needs to expand, develop and upgrade POS infrastructure quality to support card payment, particularly compatibility and security.

 

It is also crucial to improve the quality and efficiency of POS-based payment activities and take synchronous measures to bring card payment to life. Commercial banks take care and protect their customers at POS, quickly deal with incidents and customer complaints, develop card payment services, diversify utilities, maintaining and improve card payment services.

 

Besides, wage earners will be paid through bank accounts. They will be encouraged to use POS services rather than use ATMs for simple cash transactions as now.