Vietnam launches first domestic chip cards

Source:Xinhua Published: 2019/5/31 13:16:49

The Vietnam Bank Card Association, in collaboration with the National Payment Corporation of Vietnam and seven commercial banks, launched the first ATM domestic chip cards to help reduce risks of card-related crimes and enhance payment safety for customers, local media reported on Friday.

The seven banks, namely Vietcombank, Vietinbank, BIDV, Agribank, Sacombank, TPBank and ABBank, have a large number of bank cards, accounting for 70 percent of Vietnam's total ATM cards, daily newspaper Vietnam News reported. The country currently has about 76 million cards issued by 48 banks.

The State Bank of Vietnam, the central bank, plans to have at least 30 percent of active chip cards in the country by the end of 2020. The number will rise to 60 percent by the end of 2021, and 100 percent by the end of 2022.

According to banking experts, chip cards, which contain an electronic chip on the surface with a miniature processor like an independent computer, strongly accelerate transactions, and 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.

However, costs to make a chip card are 2-3 US dollars each, which is seven to eight times higher than the current strip card.
It is estimated that banks in Vietnam need to invest over 1,000 billion Vietnamese dong (nearly 43.5 million US dollars) for the replacement, not to mention the expenditures on ATMs and Points of Sale (POS) upgrading.

Vietnam's interbank e-payment system handled over 37.3 million transactions worth nearly 20.7 quadrillion Vietnamese dong (some 900 billion US dollars) in the first quarter of this year, posting year-on-year increases of 23 percent and 17.8 percent, respectively, according to the central bank. Meanwhile, domestic payment via bank cards reached 65 million transactions totaling 171 trillion Vietnamese dong (7.4 billion US dollar).

Vietnam is setting to make the rate of cash payment to be below 10 percent among all means of payment by 2020 and 8 percent by 2025, according to the country's national plan on non-cash payment market development.

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