The Vietnam Bank Card Association, in collaboration with the National Payment Corporation of Vietnam (NAPAS) and seven commercial banks, launched the first ATM domestic chip cards to meet EMV standards on May 28.
The seven banks are Vietcombank, Vietinbank, BIDV, Agribank, Sacombank, TPBank and ABBank. The banks have a large number of bank cards, accounting for 70 per cent of the country’s total ATM cards nationwide.
Deputy governor of the State Bank of Vietnam Nguyen Kim Anh said the switch from magnetic strip cards to chip cards is one of the key solutions to promote non-cash payments.
She noted that this was a trend in the region and the world in the context of the increasing number of hi-tech crimes.
Vietnam currently has about 76 million cards issued by 48 banks. The chip cards help reduce the risk of card-related crimes and enhance payment safety for customers.
The SBV plans to have at least 30 per cent of active chip cards in the country by the end of 2020. The number will rise to 60 per cent by the end of 2021, and 100 per cent by the end of 2022.
Nguyen Quang Minh, NAPAS’s deputy general director, said that the chip card was built under special standards for Vietnam’s market, but follows international standards.
In addition, customers can use both magnetic strip cards and chip cards as the commercial banks upgrade the ATM system to accept the two cards.
ATMs and Points of Sale (POS) in the country are ready for the change and it will take only three months to implement the replacement of the bank cards, he said.
Specialists said that the so-called smart cards contain an electronic chip on the surface with a miniature processor like an independent computer.
The outstanding advantage of chip cards is that the transactions are very fast. With small value transactions, there is no need to enter a PIN or signature. This type of card is much safer than the current cards.
“The application of chip card technology standards can limit the copying of information by installing theft-reading devices at ATMs, which will prevent money stealing at ATMs. Statistics show that counterfeit transaction rates fall suddenly when converting from magnetic cards to chip cards.”
However, customers are concerned that they may have to pay fees for the replacement.
Calculations show that costs to make a chip card are US$2-3 (Bt63-95) each, which is seven to eight times higher than the current card.
It is estimated that banks need to invest over 1 trillion dong (Bt13.5 million) for the replacement, not to mention the expenditures on ATMs and POS upgrading.
Some banks said they could replace chip cards for free for customers despite the big costs, while others said they would have a fee for some customers based on their financial relations, but it wouldn’t be applied to everyone.
Dao Minh Tuan, chairman of Vietnam Bank Card Association, said the fee for replacement would vary among banks. Banks should have a minimum fee for customers to ensure competition, he added. – Viet Nam News
Published : June 02, 2019
By : The Nation