The country’s leading state-owned commercial bank, Vietcombank, is pushing for a joint bankcard network toward a shared national switching system. The state bank late last year allowed the Bank for Agriculture and Rural Development (Agribank), Vietnam Industrial and Commercial Bank (Incombank) and the Bank for Investment and Development of Vietnam (Bidv) to set up a national switching agency, known as Banknet, which is to be responsible for setting up a joint card system for all banks in the country.
However, there has been no sign of Banknet being activated so far. Industry insiders say the three commercial banks behind the joint venture still lack the necessary experience to begin this operation. Vietcombank, which has the largest number of automatic teller machines with 160 out of the total of 301 units in the country, has expressed interest in assisting other joint-stock banks to develop a joint card network using Vietcombank’s technologies.
Vietcombank’s information technology centre director, Dao Minh Tuan, said that the ATM card market in Vietnam was developing at a fast pace, creating the need for a joint system that all bank cards would be able to access. At present, cardholders can only withdraw funds from their own bank’s ATMs. “Many joint stock banks would like to develop a bankcard system. We can assist them to achieve their goal by connecting them with our system,” Tuan said.
Tuan said 16 joint stock commercial banks had expressed interest in joining the plan, but only three banks had actually taken part so far, Techcombank, Habubank and Military Commercial Joint Stock Bank. Tuan said joint-stock banks that had core-banking services and were members of the Vietnam Card Bank Association, such as Asia Commercial Bank and Eximbank, could easily connect to the Vietcombank system.
Those that have ATMs and cards, but do not have a switch, can use Vietcombank’s switch. For banks that do not have ATMs but want to issue cards for use in other banks’ ATM system can lease a card personalisation system from Vietcombank. Tuan said the pan was only a transition toward a joint bankcard system across the country and not an attempt to dominate the nation’s smaller banks. “We can guarantee that the banks will operate independently from Vietcombank,” Tuan said.
In late 2002, four state-owned commercial banks saw their plan to set up a joint ATM network fall through due to disagreement. Another 10 joint stock banks then reached an agreement to launch a US$2 million system for retail banking and ATM services but the plan went awry when Vietcombank demanded majority control of the company.
The domestic bankcard market saw a great leap last year with more than 240,000 cards distributed, according to a recent report released by the Vietnam Bank Card Association. About 98% of those were debit and ATM cards. “The figure is still too small compared with the number of potential customers,” said Nguyen Thu Ha, deputy general director of Vietcombank.
Vietcombank accounts for 67% of market share, followed by Agribank, ACB, Incombank and EAB. However, in international card distribution, ACB held the largest market share with 33,000 cards, followed by Vietcombank with 27,000 cards, and ANZ 21,000 cards. Around 84,000 international cards were issued in Vietnam last year, more than double the figure of 2001. The number of ATMs has increased to 301 machines by the end of last year compared to 111 units in June 2002.