Vietnam’s card market has posted a rapid growth rate of 300 per cent a year over the last ten years however the total card number has reached only 3.5 million, which is modest compared to potential of the country with a population of more than 80 million people, said the Vietnam Bank Card Association (VCBA) at its 10th anniversary of establishment held on August 18.
According to Le Duc Thuy, the central bank’s governor, foreign banks in Vietnam deliberately want to develop various kinds of new services, particularly card services.
“With young population structure, robust economic growth, the demand for banking services will expectedly developed sharply in the near future,” said Thuy while adding that Vietnam would be a potential market for this modern payment service which cannot be found in developed countries.
In fact, between 1996 and 2002, the country witnessed no significant development in issuing and paying international cards when the initial card number of 4,000 in 1996 rose to only 40,000 in 2002.
According to Nguyen Thu Ha, chairman of VCBA, only when the core-banking software was successful launched, helping commercial banks run online for the whole system, did payment cards develop significantly.
To date, more than 20 banks have developed over 50 kinds of local and international debit and credit cards that count 3.5 million altogether, which is 50 times as much as that in 2002.
Additionally, commercial banks have also paid attention to allying together in issuing and paying cards when they have set up four card alliances including Banknet led by the Bank for Foreign Trade of Vietnam (Vietcombank), VNBC led by the Eastern Asia Bank, an alliance between ANZ and the Saigon Thuong Tin Commercial Bank (Sacombank).
Together with issuing cards, commercial banks have installed 2,200 ATMs and nearly 14,000 points of sales (Pos) nationwide.
However, Bui Quang Tien, chief of the central bank’s payment division, said infrastructure and equipment have not yet met demand, as there is only one ATM for every 45,000 people compared to the ratio of 1:19,000 people in China and 1:2,638 people in Singapore.
Regarding a scheme for the development of the local market for the years to come, the central bank said that it would set up a card switching center to network the whole four card alliances nationwide, enabling cardholders to use cards at any ATM of any bank.
Ha revealed that in the near future VCBA would also replace magnetic cards with electronic chip cards in a bid to prevent counterfeits and promote utilities of cards.
Under a scheme on non-cash payment development in 2006-2010 and vision towards 2020 launched by the central bank, Vietnam will need at least 15 years or even longer to escape from being a primarily cash economy.
Investment, Vietnam Panorama
Vietnamese
